Parsad Posted March 8, 2011 Author Share Posted March 8, 2011 Actually, Francis' US funds seem to have more of a hedge-fund structure in operation. He told me a couple of years ago that he was planning on possibly starting something along these lines. At the time, I told him that it would be great, because then people would really get to see how good a manager he is when not under mutual fund restrictions and allowed to compete head-on with other hedge-fund managers. I didn't realize that this is the vehicle until I read the annual report, but he has the fixed fee structure like a mutual fund. With his historical track record regarding reducing his fixed fees in years he is dissatisfied with his performance, this could be a fantastic hybrid vehicle for U.S. investors. As I've said before, he is one of the most ethical people I know, and in this business, finding someone you can trust is pretty much more important than anything else. Just remember...this vehicle is probably going to be more volatile as it is concentrated, but I would imagine his long-term results will be better than the Canadian Chou Funds. Cheers! Link to comment Share on other sites More sharing options...
matjone Posted March 22, 2011 Share Posted March 22, 2011 Is there any way I can find out if Francis Chou has his own money invested in the fund, and if so, how much he has invested? Is this required to be filed? Has anyone seen it in anywhere? Thanks, Link to comment Share on other sites More sharing options...
Parsad Posted March 22, 2011 Author Share Posted March 22, 2011 Is there any way I can find out if Francis Chou has his own money invested in the fund, and if so, how much he has invested? Is this required to be filed? Has anyone seen it in anywhere? Thanks, In the notes of the Chou Fund's annual report, it is stated that management, directors and officers do invest in the funds from time to time. Dollar amounts aren't given, but I'm quite certain Francis eats his own cooking. Cheers! Link to comment Share on other sites More sharing options...
returnonmycapital Posted March 22, 2011 Share Posted March 22, 2011 With reference to Francis' ownership in the Chou America Funds: At launch, he invested USD 500,000 in each of the two funds. Now worth considerably more. Link to comment Share on other sites More sharing options...
mhdousa Posted March 22, 2011 Share Posted March 22, 2011 It's been awhile since I've asked, but anyone have any idea when the funds will be available through Fidelity? Thanks. Link to comment Share on other sites More sharing options...
Uccmal Posted March 22, 2011 Share Posted March 22, 2011 One way or the other Francis eats his own cooking, either directly, or through his holdings in Fairfax. Fairfax being the largest shareholder of Chou funds and Chou being one of the larger individual shareholders of FFH with 62000 shares. If your broker doesn't offer Chou funds get a second broker. When friends ask me to manage money for them or give them suggestions Chou is the only one I recommend. Sorry Sanj, the amounts are too small for you to bother with the paperwork... Link to comment Share on other sites More sharing options...
SJUFootball16 Posted March 22, 2011 Share Posted March 22, 2011 It's been awhile since I've asked, but anyone have any idea when the funds will be available through Fidelity? Thanks. I spoke with Francis a few weeks back on this issue and he told me that it would probably take between 3-6 months. My hope is that it is closer to three! Link to comment Share on other sites More sharing options...
mhdousa Posted March 22, 2011 Share Posted March 22, 2011 It's been awhile since I've asked, but anyone have any idea when the funds will be available through Fidelity? Thanks. I spoke with Francis a few weeks back on this issue and he told me that it would probably take between 3-6 months. My hope is that it is closer to three! Thanks! Glad to hear it's in the works. Link to comment Share on other sites More sharing options...
Parsad Posted March 22, 2011 Author Share Posted March 22, 2011 When friends ask me to manage money for them or give them suggestions Chou is the only one I recommend. Sorry Sanj, the amounts are too small for you to bother with the paperwork... No worries Al...I do the same! ;D Even my family knows that if I get hit by a bus tomorrow, hold the Fairfax shares and put the rest of the money...half with Francis and half with Tim...regardless of what happens in the stock market, don't worry and don't sell unless you really need the money. Cheers! Link to comment Share on other sites More sharing options...
ourkid8 Posted March 22, 2011 Share Posted March 22, 2011 Who is Tim? (My mistake...) When friends ask me to manage money for them or give them suggestions Chou is the only one I recommend. Sorry Sanj, the amounts are too small for you to bother with the paperwork... No worries Al...I do the same! ;D Even my family knows that if I get hit by a bus tomorrow, hold the Fairfax shares and put the rest of the money...half with Francis and half with Tim...regardless of what happens in the stock market, don't worry and don't sell unless you really need the money. Cheers! Link to comment Share on other sites More sharing options...
Parsad Posted March 22, 2011 Author Share Posted March 22, 2011 Half with Tim... who is he? Tim McElvaine...www.mcelvaine.com. Yes, I know I'm going to hear about how there are managers out there with better results than Francis or Tim. I've heard it all before! The one thing I know is that both Tim and Francis will always put their partners ahead of themselves. Unfortunately, if I'm not around, for my family's sake, trust and ethics are more paramount than how much so-called "alpha" someone can generate. They will both beat the markets long-term, and my family's money will be safe. They will be able to sleep at night because Tim and Francis are looking after their capital. And wherever I might be, at least I will know they are in good hands. Cheers! Link to comment Share on other sites More sharing options...
sdev Posted March 23, 2011 Share Posted March 23, 2011 I just read some of Francis Chou's old annual letters, and I'm sure that many of you already know this, but for those like me that did not before...it looks like Francis just missed the boat in his mutual fund on buying corporate CDS by a matter of months because of regulatory approval. Had he been legally able to act when he saw the opportunity (like Fairfax was able to), I bet a lot more people would be singing praises about him. Fun learning more about his history. Link to comment Share on other sites More sharing options...
Parsad Posted March 23, 2011 Author Share Posted March 23, 2011 Also, while many of you sing the praises of Fairfax over the last couple of years, the idea behind the CDS's came from both Brian and Francis. While many have thanked Brian, it was also Francis who was very instrumental in those huge gains. And as Sdev said, if it wasn't for regulatory delays, the Chou Funds would have also bought CDS's. By the time he received approval, the prices had already started to climb. Cheers! Link to comment Share on other sites More sharing options...
CONeal Posted March 23, 2011 Share Posted March 23, 2011 I've been reading everything I can about Mr. Chou over the last few days and have a question. What is Mr Chou's relationship with Fairfax now? From reading some of the material is seems like he does not work there anymore. Is this correct? Clarity would be greatly appreciated. Don't really have the detailed history as some of you have regarding Fairfax, just wondering if the mutual funds are his top priority now or if he's still moonlighting.. Link to comment Share on other sites More sharing options...
Parsad Posted March 23, 2011 Author Share Posted March 23, 2011 Francis runs only the Chou Funds now. This was done a few years ago, because Fairfax is a large investor in the Chou Funds and he was a vice-president at the company. He remains one of the largest individual shareholders of Fairfax and has a close personal relationship. He's never sold a share since he bought them at $3. I'm sure on occasion they pick his brain and vice-versa, but Francis' sole occupation is running his funds. Cheers! Link to comment Share on other sites More sharing options...
FFHWatcher Posted March 24, 2011 Share Posted March 24, 2011 Does it really take this many posts to figure out whether or not you want to invest with someone? I am not directing this question to anyone as I can't remember who started this thread. Just a general comment. No number of questions or analysis will make an investment perfect. With any investment fund you give up all powers to direct your investments and completely entrust it to someone else. You either trust that investor or you don't. Prem has trusted him for 25 years or something like that. He has been nothing but ethical. What else does one need to know? His favourite colour is green? I love the fact that Chou has a 2% early redemption fee for 24 months after purchasing and, I believe he has the option to keep those fees himself but instead adds the proceeds into the fund itself and it boosts the performance of the long term holders. Wish the fee was 10%, not 2%. Disclosure : Long Chou for at least 5 years Link to comment Share on other sites More sharing options...
opihiman2 Posted March 25, 2011 Share Posted March 25, 2011 any know if the expense ratio is going up after July 1st? "As stated in the current prospectus, the Fund’s annual operating expense ratio (gross) is 5.22%. However, the Adviser has contractually agreed to waive a portion of its fees and reimburse certain expenses through July 1, 2011" I was wondering if someone could help me understand. So, the expense ratio is 5.22%? Does that mean the annual returns are handicapped at 5.22%? I am just wondering because that seems really high for a mutual fund. Link to comment Share on other sites More sharing options...
Guest Posted March 25, 2011 Share Posted March 25, 2011 any know if the expense ratio is going up after July 1st? "As stated in the current prospectus, the Fund’s annual operating expense ratio (gross) is 5.22%. However, the Adviser has contractually agreed to waive a portion of its fees and reimburse certain expenses through July 1, 2011" I was wondering if someone could help me understand. So, the expense ratio is 5.22%? Does that mean the annual returns are handicapped at 5.22%? I am just wondering because that seems really high for a mutual fund. The expense ratio right now is 1.75%. That's still high but not super unreasonable given the low assets. The expense ratio of 5.22% is before waiver. So shareholders are charged the 1.75%. I'm afraid of what it will be after July 1st since the waiver expires then. I'm trusting the Chou will extend it. If he doesn't then that's way, way too high. I am disappointed he has a 12b1 fee. I hope he eliminates that when assets are at a better level. Link to comment Share on other sites More sharing options...
Parsad Posted March 25, 2011 Author Share Posted March 25, 2011 I was wondering if someone could help me understand. So, the expense ratio is 5.22%? Does that mean the annual returns are handicapped at 5.22%? I am just wondering because that seems really high for a mutual fund. The fee is presently high because the fund just launched and the assets under management is very low. As more capital comes in, that expense ratio will decrease until it is closer to any other fund. In the meantime, it looks like Francis is eating a portion of the cost for the early investors. Cheers! Link to comment Share on other sites More sharing options...
Shane Posted March 25, 2011 Share Posted March 25, 2011 Parsad, Are you saying that his american fund is similar to a hedge fund because of the derivatives option? Link to comment Share on other sites More sharing options...
Parsad Posted March 25, 2011 Author Share Posted March 25, 2011 Derivatives and I believe he can go to 25% positions, whereas most mutual funds are limited to 10%. Cheers! Link to comment Share on other sites More sharing options...
ericd1 Posted March 26, 2011 Share Posted March 26, 2011 Here's the prospectus. Suggests 25-35 positions 80 percent equities up to 20 percent debt. Can hedge covered calls derivatives etc. "patient long-term" investments. http://www.sec.gov/Archives/edgar/data/1486174/000031577410000186/dn1a-a.htm Great place to find ideas! Link to comment Share on other sites More sharing options...
Shane Posted March 26, 2011 Share Posted March 26, 2011 Parsad, Chou now runs quite a few funds, as someone who has never worked in the industry this might be an incorrect assumption, but do you think he is spread too thin? I have a very hard time balancing work/school/and personal investing, I think running more than a 1-2 funds would be a monumental task. Does he have a team of analysts (If so are they good?), or is he a one-man show? I am very interested in finding an active manager to invest with, I like that he has solid performance and people here have some personal knowledge of him which allows me to feel more comfortable... also because I don't do anything with derivatives it's attractive that he does. Link to comment Share on other sites More sharing options...
mhdousa Posted March 26, 2011 Share Posted March 26, 2011 Parsad, Chou now runs quite a few funds, as someone who has never worked in the industry this might be an incorrect assumption, but do you think he is spread too thin? I have a very hard time balancing work/school/and personal investing, I think running more than a 1-2 funds would be a monumental task. Does he have a team of analysts (If so are they good?), or is he a one-man show? I am very interested in finding an active manager to invest with, I like that he has solid performance and people here have some personal knowledge of him which allows me to feel more comfortable... also because I don't do anything with derivatives it's attractive that he does. Shane, I'm not Sanj, but I'll try to answer. I think a bigger issue for managers than number of funds is asset base. According to Morningstar, he's managing about 1.7b. I'd say that's a moderate amount of assets. It's not so much that his investment universe is hindered. He also has very low turnover in his funds (about 3% for the Canadian Chou Associates fund), so he's not trying to turn over his entire portfolio multiple times a year. Someone should correct me if I'm wrong, but I think most of his funds are variations on the same theme (some are more equity-focused and others more income-focused), so there's not a whole lot of juggling he has to do. In short, it's not something that gives me pause about investing with him. -M Link to comment Share on other sites More sharing options...
returnonmycapital Posted March 26, 2011 Share Posted March 26, 2011 There is no 12b-1 fee on the Chou America funds. They have been eliminated. Link to comment Share on other sites More sharing options...
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