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Again a well reasoned argument.

Im kinda playing devils advocate here b/c I too was put off by the high fees and lack of transparency so far in this new fund. I still dont know that Ill invest but for the first time Im intrigued by a mutual fund. Heres what Im thinking as of now.

I think every TMF person associated with this fund is reading this discussion board and every negative article thats been posted about it on the web. The press about the fund has been withering. Everyone is crying hypocrisy about a company that dismissed mutual funds except for the lowest priced, longest tenured, highest rated ones and that now is starting an expensive fund with a brand new manager with no rating. Either TMF has sold out to the highest degree, or they know what theyre doing.

My gut tells me that they will keep the waiver around as long as they are even or losing to the S&P500. I think that if they significantly outperform it, they will waive teh waiver and start charging the higher fees. But as we all know, if youre beating the S&P by 5-6%, people dont really mind paying 2.5% for that outperformance. If TMF waived the waiver after one year and they werent outperforming the S&P, itd be enough for me to remove all my money (minus 2.3%!) and also immediately stop subscribing to all newsletters. It would be such a slap in the face that Id likely never use TMF for investment info again. I imagine they know that.

I think I still would disagree on the apparent lack of experience of Bill Mann. He has been picking stocks for many years now and for the most part has done a very good job. The International Stock newsletter he ran hasnt done so well but its still early. I still would give him the benefit of the doubt though I accept that most knowledgeable mutual fund investors would laugh at trusting money to someone with no track record.

Another thing that I liked about the fund was that I believe I read somewhere that the fund will be relatively concentrated. Like maybe 30 positions or so? This would make it easier for the manager to manage the investments without needing a huge team to do research. One of the things thats always bothered me with mutual funds is they own hundreds of positions. Who can keep track of that? And when you hit that 6 bagger, its doesnt move the needle cause of the 399 other positions that arent home runs. I also suspect this is one of the reasons the funds holdings arent listed yet. They are so small that they are afraid of piggy backing or of looking silly by selling a fund with only a handful of holdings.

Bottom line for me is that this is the first time Ive been really interested in a fund b/c for the first time I feel I know the style/temperament of the manager. Ive seen how hes operated for 5 years or so and read his writings. What kills me is that TMF would charge such a high fee for this service. It really flies in the face of all theyve ever preached. But again, if they significantly outperform, it wont really matter.

I dont know how hedge funds really operate but maybe the idea here is to do something like that. The fees are certainly moving in the hedge fund direction. Are hedge funds more concentrated? I know they also scour the universe of investments for undervalued opportunities and some do it very well. I wouldnt have a clue how to value a warrant, but there are some who can make a killing off of them.

Thanks for challenging my thoughts LC. Still not sure where Im going with this one but your reasoned input is helpful.
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