Fidelity Contrafund

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scotthew
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Fidelity Contrafund

Post by scotthew »

I need some handholding here to persuade me to sell a large position in FCNTX and move over it over to an index fund. FCNTX has treated me well since 2003, and I have no complaints (except for the fees being 0.6%). It is about 9% of my overall portfolio, the rest being predominantly low cost index funds (four fund portfolio essentially). I like the idea of taking a risk to achieve a higher return on the small part of the portfolio, but in my early 40's not really too confident in this approach any more. Chime in, Bogleheads.
Twins Fan
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Re: Fidelity Contrafund

Post by Twins Fan »

Just my opinion here... But, I have the Contrafund available in my 457b and have looked into it some. My personal feeling is it has basically become a closet index fund itself. It became to big for it's britches as many hot funds do. It's moves sort of move the market being so large, so why hold it instead of the market.

Just my simple take on it.
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Toons
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Re: Fidelity Contrafund

Post by Toons »

I am a Vanguard Investor,,,but
I have some managed funds that I have held for 15 to 20 years with higher fees.(A couple were load funds)
They have performed VERY well.
I consider them part of the portfolio.
I have no plans to liquidate.
Nothing wrong with owning Contrafund in my humble opinion,as a portion of your portfolilo. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
LeeMKE
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Re: Fidelity Contrafund

Post by LeeMKE »

I'm not sure if my experience will help, but here goes.

I transitioned to a Boglehead portfolio after doing very well for myself, but realizing I was flying by the seat of my pants and could not expect to continue to get lucky. My approach was impossible to teach, and at some point someone else may need to oversee or manage the portfolio, so I'm getting it better organized so that even a monkey could manage it.

I moved the money from mutual funds first, and then finally sold the few individual stocks I held. One was a small amount in a small startup I'd consulted with a few years ago. That was a hard one to let go, but I'd made a nice profit and it was exceptionally risky, so I finally sold it. The darn stock tripled in the next 8 months. I'm wishing I'd kept it, but then, I also wish I'd taken a job with this college drop out who was hiring his first 100 employees. Dell Computer early employees all retired with millions as the firm paid raises in stock during those early years.

Oh well. You'll know when it is time to give it up. For me, rebalancing every quarter gave me a nudge, and after a few quarters I was ready to streamline the last few available threads. Now I have just one source of funds that I can't move until it matures, but otherwise am all in Boglehead.
The mightiest Oak is just a nut who stayed the course.
Stonebr
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Re: Fidelity Contrafund

Post by Stonebr »

Dilemma.

My wife has her own ideas about investing and she has owned Fidelity Contra for her IRA since about 1990 and has kicked my butt with it. I've never tried to convince her to move to indexing since her ideas have worked out at least as well as my Boglehead ideas. If Will Danoff ever quits, all bets are off. This is one of the three funds Jack Bogle mentions (and salutes) in his Little Book of Commonsense Investing. That was almost 10 years ago, and I haven't noticed a lot of slackening since then.

If it helps, I owned one of the other funds that kicks butt, Mutual Series Z, and sold it off about 10 years ago when I Bogle-ized. No regrets.
"have more than thou showest, | speak less than thou knowest" -- The Fool in King Lear
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Aptenodytes
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Re: Fidelity Contrafund

Post by Aptenodytes »

You say it "treated you well" since 2003, but those kinds of words are sort of red flags. How thoroughly have you compared the fund's performance to alternatives? It seems like it beat index funds for a few years early on, and then largely tracked them (at higher costs). So you are betting on the future performance being more like the early part of that period and less like the latter.

Another way to say exactly the same thing is "The fund has not treated me well since 2009." But that puts a different spin on it, doesn't it?
2retire
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Re: Fidelity Contrafund

Post by 2retire »

I have held it even longer. It is about 5% of my portfolio right now. Since the early 90's, my XIRR is 11.14%.

It has really become a closet index fund. Here is a telltale chart of its performance.

http://morning-wave-7809.herokuapp.com/#fcntx/VTSMX

A large part of the run up in the 2000's was because he went heavy into Apple. At one point, over 9% of the portfolio was in Apple.

Personally, I now redirect my cap gains and dividends from that fund into VTSAX.
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powermega
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Re: Fidelity Contrafund

Post by powermega »

Is the fund position held in a qualified account? If so, just pull the trigger and liquidate. If in a taxable account, realize all losses asap, and slowly cull out gains going forward. If you really like Contrafund, you can consider it to be something of a tilt allocation, but I doubt it has a low enough of a correlation to really be considered one.
Even a stopped clock is right twice a day.
white_water
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Re: Fidelity Contrafund

Post by white_water »

Since you're in your early 40's a 9 % holding in FCNTX probably won't hurt you. Except for the .63 ER it's one of the best as others pointed out. I owned it for 25+ years, now prefer more BH style allocation for retirement. Caveat: when Will Danoff retires or moves on, it would be prudent to re-evaluate. Just one old guy's opinon.
Strayshot
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Re: Fidelity Contrafund

Post by Strayshot »

I had a quarter of my 401k in Contrafund. It even went to a commingled pool to lower the expenses further. I moved it all into my best-deal-on-the-planet .02% ER S&P index about 7 months ago (where 40% was already hanging out) and never looked back.
Read or re-read Jack's common sense on mutual funds, then convince yourself you want to stay in Contrafund. I couldn't (this was after the re-read, took a couple years for the first read to really sink in and the re-read sealed the deal).
inbox788
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Re: Fidelity Contrafund

Post by inbox788 »

I held Contrafund for a decade until recently. Was one of the better funds available at the time, and when better index funds came along, I was slow to transfer. After watching a year of index outperforming Contrafund, I still wasn't eager to switch, so I switched piecemeal in 3-4 tranches over 1-2 years. I've been tracking the difference (whole transfer, not just FCNTX), and difference has been 2.76%, 0.33%, -0.26%. What it means is that if I did it all at once, the whole portfolio would be up 2.76%, not just the quarter transferred. And if I did it all when index funds first became available, I would have been even better off. However, if I made the transfer around the time of the latter two transfers, both in 2014, it wouldn't have made much of a difference. Still the added expense makes it a compelling change.

So transfer it all now or start with transferring half now and you can either half regret doing it or not doing it sooner.
flyingaway
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Re: Fidelity Contrafund

Post by flyingaway »

Contrafund has been recommended in many articles related to retirement accounts, and was claimed to beat S$P500 for many years. I had it before I knew anything about index funds and boglehead stuffs. I got rid of it after I understood the index funds and never regretted. Even in my wife's account with just S&P500 index, I used it to replace the Contrafund.
carolinaman
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Re: Fidelity Contrafund

Post by carolinaman »

I own Contrafund and have been very pleased with its long term results. However, due to its huge size and number of holdings, it is now effectively a "closet index" fund. I will probably transfer my Contrafund holding to VTI. I just have not taken the time to do it. My Contrafund is in a TIRA. If it were in a taxable account and there was a large capital gain, I might choose the stay the course, because IMO as long as Danoff is running the fund, it will probably match the S&P500 index.
dirkronk
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Re: Fidelity Contrafund

Post by dirkronk »

When I put my wife's tIRA into Contrafund in 1996, the fund had a 3% load (waived for retirement accounts, or I would have chosen something else), an ER of 1%, and a volatility rating a step or two higher than VFINX (per Kiplinger magazine...not the online "fund finder" which has a mind of its own)--but it also outperformed for a significant number of years. And over the last 19 years, the load went away (early on), the ER edged down steadily by over a third, and the volatility rating (again, per Kiplinger) dove to equal to and occasionally rated a step below VFINX. Getting in and staying put paid off nicely--so much so that I put my own 401k into Contrafund when it became the only bright spot in my company's lineup of options several years back (nope, no index funds available back then). M* X-Ray tells me that just over 25% of our entire portfolio is in the fund. Am I worried? Not a bit.

Johnep's observations, however, are spot on and his situation is almost identical to mine. My wife is now three years away from RMDs, and I'm looking to transfer her account into something with even less volatility...and more diversification (i.e., bonds). And good as Danoff is, asset bloat is undoubtedly taking its toll on returns...has been for a while. Frankly, I'm impressed that he can match the index at this point. So sometime in the next year or so, my wife's funds will find a new home, but I'll probably hang on to Contrafund in my 401k for a while (I'm still 5+ years away from RMDs) unless they reconfigure the options and introduce something more palatable.

Dirk
Jack FFR1846
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Re: Fidelity Contrafund

Post by Jack FFR1846 »

The vast majority of my money was in contrafund, having rolled from fidelity 401k to an IRA. After finding Bogleheads, I had to convince myself that index funds were the way to go. Here's a homework assignment for you. Go to fidelity's site and hit research. Then mutual funds. At the top put contrafund in the box. Click on compare under the chart. Near the top, there is an add fund space. Type in FSTVX, which is US total Stock Market. Now hit 5 years at the top of the chart. They look the same, don't they? But FSTVX has an ER of 0.06 where contrafund is 0.6. I moved all my equity funds to this fund.
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awval999
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Re: Fidelity Contrafund

Post by awval999 »

Jack FFR1846 wrote:The vast majority of my money was in contrafund, having rolled from fidelity 401k to an IRA. After finding Bogleheads, I had to convince myself that index funds were the way to go. Here's a homework assignment for you. Go to fidelity's site and hit research. Then mutual funds. At the top put contrafund in the box. Click on compare under the chart. Near the top, there is an add fund space. Type in FSTVX, which is US total Stock Market. Now hit 5 years at the top of the chart. They look the same, don't they? But FSTVX has an ER of 0.06 where contrafund is 0.6. I moved all my equity funds to this fund.
Total Return charts already take into account the ER. If Contrafund matches FSTVX (and I don't know if it does) then the returns are 1=1. They don't then deduct the ER. All total return charts include the expense ratio deductions.
Boglegrappler
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Re: Fidelity Contrafund

Post by Boglegrappler »

I just looked at the recent monthly holdings report (quickly).

Its an interesting fund. The top ten holdings are usual suspects,hardly contra-anything, and there are many other significant holdings that fit a blue-chip profile.

They also seem to have a large number of smaller % positions in what amounts to late-stage venture capital (I see the Uber convert and an Airbnb holding, among others). Not sure what % of the fund these types of investments add up to, but it looks like in the aggregate its more than 10-15% (I haven't done the addition). No one position is very large, but the total of this type could have an impact if things don't pan out overall.

A regular index fund is safer, IMO, but its certainly possible that Contra could continue to perform well.
dirkronk
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Re: Fidelity Contrafund

Post by dirkronk »

Boglegrappler wrote: Its an interesting fund. The top ten holdings are usual suspects,hardly contra-anything, and there are many other significant holdings that fit a blue-chip profile.
The fund hasn't been "contrarian" since I've first been aware of it...around 1995. Part of my learning curve back then was to buy Kiplinger's annual Mutual Fund publication, and they listed Contrafund as one of the top 50 most notable funds at the time, but pointed out specifically that investors should NOT expect a contrarian tilt. How Fidelity came up with the name is beyond me. Maybe it was originally intended to go that way and Danoff just took it in a different direction. Dunno.

Dirk
inbox788
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Re: Fidelity Contrafund

Post by inbox788 »

dirkronk wrote:
Boglegrappler wrote: Its an interesting fund. The top ten holdings are usual suspects,hardly contra-anything, and there are many other significant holdings that fit a blue-chip profile.
The fund hasn't been "contrarian" since I've first been aware of it...around 1995. Part of my learning curve back then was to buy Kiplinger's annual Mutual Fund publication, and they listed Contrafund as one of the top 50 most notable funds at the time, but pointed out specifically that investors should NOT expect a contrarian tilt. How Fidelity came up with the name is beyond me. Maybe it was originally intended to go that way and Danoff just took it in a different direction. Dunno.

Dirk
There are so many ways to make up the contra part (Danoff went in a contra direction, it's contra to passive funds, it's contra to the sp500, it's contra to diversification, etc.). It's been a while since I've looked at its holdings, and I recall AAPL was their biggest holding, with BRK 2nd or 3rd. I might be mistaken, but I think they had more AAPL than GOOG, which if you add up the split shares look like their biggest holding today.

Jim Cramer has been called a momentum trader (vs. market timer vs stock picker) and based on their top 10 holdings, it looks to me like the Contrafund is following similar momentum picks.

Momentum vs. Timing
http://realmoney.thestreet.com/articles ... vs.-timing

Top 10 Holdings (29.47% of Total Assets)
Company Symbol % Assets YTD Return %
Berkshire Hathaway Inc Class A BRK.A 4.86 -2.49
Apple Inc. AAPL 3.76 17.38
Wells Fargo & Company Common St WFC 3.43 1.97
Facebook, Inc. FB 3.34 2.22
Biogen Idec Inc. BIIB 3.07 22.49
Google Inc. GOOGL 2.64 8.36
Google Inc. GOOG 2.62 8.54
Walt Disney Company (The) Commo DIS 1.97 12.42
Gilead Sciences, Inc. GILD 1.92 10.15
Colgate-Palmolive Company Commo CL 1.86 3.15

http://finance.yahoo.com/q/hl?s=FCNTX+Holdings
inbox788
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Re: Fidelity Contrafund

Post by inbox788 »

Boglegrappler wrote:I just looked at the recent monthly holdings report (quickly).

Its an interesting fund. The top ten holdings are usual suspects,hardly contra-anything, and there are many other significant holdings that fit a blue-chip profile.

They also seem to have a large number of smaller % positions in what amounts to late-stage venture capital (I see the Uber convert and an Airbnb holding, among others). Not sure what % of the fund these types of investments add up to, but it looks like in the aggregate its more than 10-15% (I haven't done the addition). No one position is very large, but the total of this type could have an impact if things don't pan out overall.

A regular index fund is safer, IMO, but its certainly possible that Contra could continue to perform well.
Interesting read. I didn't know they were into private equity like Uber and Pinterest, but I doubt it's that significant. I did a morningstar xray and found 0% small cap, with 59% large growth and 23% large core, so doesn't leave a lot of room for other investments, so essentially another large cap fund.

Their holding in a company like Uber is so small, both as a percentage of how much Uber they actually own (1-2%?) and as a percentage of Contrafund (0.01%) that even if the company succeeded extraordinarily and gained 100X, they wouldn't move the needle much in the overall fund value. And with all the failures among these startups, it would even make any addition minor, and possibly the space of pre-IPO investments may not be profitable. I wonder if Contrafund managers are asking for these investments, or they're being pushed into these by their investment group that has to sell them. ("company XYZ wants to privately raise $100M, can Contrafund take $20M?")

When you say impact, do you mean positive or negative or both? There's been talk of a private equity bubble that's being compared to the 2000's tech bubble, and a lot of people are asking if were in a bubble now with both overall market and specifically Nasdaq QQQ.

http://www.dallasnews.com/business/head ... 0311-1.ece
AviN
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Re: Fidelity Contrafund

Post by AviN »

Aptenodytes wrote:You say it "treated you well" since 2003, but those kinds of words are sort of red flags. How thoroughly have you compared the fund's performance to alternatives? It seems like it beat index funds for a few years early on, and then largely tracked them (at higher costs). So you are betting on the future performance being more like the early part of that period and less like the latter.

Another way to say exactly the same thing is "The fund has not treated me well since 2009." But that puts a different spin on it, doesn't it?
To clarify, a fund's reported performance includes its expense ratio. So if an actively managed fund with a high expense ratio tracks an index fund with a low expense ratio, then this indicates either luck or skill on the active manager's part.

Avi
inbox788
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Re: Fidelity Contrafund

Post by inbox788 »

AviN wrote:
Aptenodytes wrote:You say it "treated you well" since 2003, but those kinds of words are sort of red flags. How thoroughly have you compared the fund's performance to alternatives? It seems like it beat index funds for a few years early on, and then largely tracked them (at higher costs). So you are betting on the future performance being more like the early part of that period and less like the latter.

Another way to say exactly the same thing is "The fund has not treated me well since 2009." But that puts a different spin on it, doesn't it?
To clarify, a fund's reported performance includes its expense ratio. So if an actively managed fund with a high expense ratio tracks an index fund with a low expense ratio, then this indicates either luck or skill on the active manager's part.

Avi
I'm not sure how much luck or skill explains the ability to sustain a portfolio out-performance that overcomes the higher fee. The only luck needed was the generally bullish historic trend and expected future bullish outcome in the long run ("stocks will go up and down, but in the long run they will go up"). Having more bullish growth stocks (AAPL, GOOG, etc.) was easily sufficient to overcome the relative small difference in fees. A bearish fund that outperforms is an anomaly in this environment and the skill and luck in that is more significant (http://dealbook.nytimes.com/2014/11/24/ ... fits/?_r=0 ).

Is Morningstar a good and accurate way to track and compare?

http://quicktake.morningstar.com/datade ... turns.html

Do they really track the dividends and expenses as they change throughout all the years accurately?

http://quotes.morningstar.com/chart/fun ... 2%3A955%7D

Looks like the fund has historically done well, but since around 2008 only tracked the market.
inbox788
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Re: Fidelity Contrafund

Post by inbox788 »

scotthew wrote:I like the idea of taking a risk to achieve a higher return on the small part of the portfolio, but in my early 40's not really too confident in this approach any more.
FYI:
You may want to visit the Biotech Tilt threads and see if you agree or disagree with the strategy.
http://www.bogleheads.org/forum/viewtop ... 0&t=130347

Recently, I posted the top holdings, but it didn't click and sink in until now how much Biotech is currently represented in FCNTX.
#5 Biogen Idec Inc. BIIB 3.07 22.49
#9 Gilead Sciences, Inc. GILD 1.92 10.15
http://finance.yahoo.com/q/hl?s=FCNTX+Holdings

Just these 2 holding are 5%. I don't think the total of all the biotechs in the SP500 is that high (ALXN AMGN BIIB CELG GILD REGN VRTX), but if there's an easy way to confirm this, please do. And I'm not seeing an easy way to add up total biotech exposure in FCNTX. It is known that FCNTX is overweight IT and Healthcare and underweight Energy, Telcom, Utilities.

AS OF 12/31/2014, Biogen was #7 and GilD not in the top 10.
https://fundresearch.fidelity.com/mutua ... /316071109

I think most of the recent outperformance comes from this tilt. Whether there's a bubble or not...you can choose to enter the fray or ignore it completely...
http://www.fiercebiotech.com/story/sque ... 2015-03-23

http://quotes.morningstar.com/chart/fun ... 2%3A955%7D
Louis Winthorpe III
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Re: Fidelity Contrafund

Post by Louis Winthorpe III »

You won't hold it forever. The manager will leave, the performance will disappoint, or something else will happen that causes you to sell. So why not do it now, and then you never have to worry about deciding when in the future to pull the trigger?
rgs92
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Re: Fidelity Contrafund

Post by rgs92 »

If you compare Contrafund to QQQ (Nasdaq EFT) over 10 years, it seems that Contrafund has more volatility and a lower return. I have always thought of FCNTX (Contrafund) as a Nasdaq surrogate, so that's why I make this comparison.
dirkronk
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Re: Fidelity Contrafund

Post by dirkronk »

rgs92 wrote:If you compare Contrafund to QQQ (Nasdaq EFT) over 10 years, it seems that Contrafund has more volatility and a lower return. I have always thought of FCNTX (Contrafund) as a Nasdaq surrogate, so that's why I make this comparison.
Interesting. I've never thought of the fund that way at all. It started in 1967. NASDAQ didn't start until 1971 and wasn't a serious force in the market until much later. And the QQQ fund didn't start until 1998. I've held Contra since 1996. It would be interesting to see the volatility of it vs. NASDAQ from then through, say, 2005. The last 10 years? That's when the wild tech stocks of earlier years became settled, solid, dividend-paying entities. I'm not surprised the volatility ramped down in the NASDAQ as a whole.

Dirk
marie567
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Re: Fidelity Contrafund

Post by marie567 »

I've had the dilemma of selling Contrafund in my taxable account and haven't due to taxes. Previously to estimate the taxes I took 15% on the appreciation (then add California regular income taxes), thought I can't pay that in one or even two years.

But I just compared selling now to continue to pay taxes on capital gains distributions. I've been getting by on paying the tax on the smaller capital gain distribution and each year saying I'll think about selling next year. If I sell in year one versus continue to pay increased capital gains taxes, I'd come out at the same amount taxes paid in 8 years, but I'd still have the unrealized appreciation to pay if I don't sell.

Then I consider the extra capital gains taxes I'm paying on a fund that generates a high amount of turnover compared to an index fund. However, I have a few index funds that did generate some capital gains in 2014, although much smaller than Contrafund. I don't know that I would eliminate capital gains by going to an index fund.

And, then the promise of actively managed funds was that they would do better than the index. (I understand the premise that they haven't.) If so, then factoring in increased taxes could be worth it as Contrafund's 10 and 15 year performance was a bit better than the S&P 500 (as listed on Morningstar). Although that is the past not necessarily the future.

I haven't made investing decisions based on dissecting my investments and probably still won't. I see current taxes are driving my decisions and I'd rather save on taxes today then taxes years from now. So I'll probably continue with my Contrafund and consider selling when I rebalance and/or need cash to live. I just switched the div/cap gains to go to my cash account. My initial thought was of course I'd sell Contrafund if not for the taxes, but in looking at the performance it has done pretty well. I appreciate the advice on monitoring the fund manager's possible some day exit.
inbox788
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Re: Fidelity Contrafund

Post by inbox788 »

http://www.advisorperspectives.com/news ... rafund.php
An In-Depth Look at Fidelity's Contrafund
March 24, 2015
by Larry Swedroe

Will Danoff Fidelity Contrafund Portfolio Manager on CNBC today
http://video.cnbc.com/gallery/?video=3000364346
http://video.cnbc.com/gallery/?video=3000364349

http://seekingalpha.com/article/2981176 ... contrafund
A Peek Inside The Fidelity Contrafund
Mar. 6, 2015

marie567 wrote:I've had the dilemma of selling Contrafund in my taxable account and haven't due to taxes.
I recall large dividends and distributions, especially at year end, so not really tax efficient for taxable account. BRK is very tax efficient for holding in taxable for long periods of time.
dirkronk wrote:
rgs92 wrote:If you compare Contrafund to QQQ (Nasdaq EFT) over 10 years, it seems that Contrafund has more volatility and a lower return. I have always thought of FCNTX (Contrafund) as a Nasdaq surrogate, so that's why I make this comparison.
Interesting. I've never thought of the fund that way at all. It started in 1967. NASDAQ didn't start until 1971 and wasn't a serious force in the market until much later. And the QQQ fund didn't start until 1998. I've held Contra since 1996. It would be interesting to see the volatility of it vs. NASDAQ from then through, say, 2005. The last 10 years? That's when the wild tech stocks of earlier years became settled, solid, dividend-paying entities. I'm not surprised the volatility ramped down in the NASDAQ as a whole.

Dirk
I wouldn't compare to Contrafund to QQQ. I think FOCPX (normally invests at least 80% of assets in securities principally traded on NASDAQ® or an over-the-counter (OTC) market) is better comparison to QQQ.
http://finance.yahoo.com/q/pr?s=FOCPX+Profile

I've yet to find an adequate low fee index fund for QQQ, so I still hold some FOCPX, but I've been reducing position. As far as FCNTX, I'm completely out now, but glad to see historically it was the better performer. Just don't have confidence it will be going forward. And having Biotech, and private equity in the fund makes me wonder what type of risk it took to getting the outperformance.
Middle
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Re: Fidelity Contrafund

Post by Middle »

You could always split the difference and sell half of it to convert to an index fund.

I too have some Contrafund, but it represents less than 1% of my portfolio. I think about getting rid of it, and may take an opportunity when I need to rebalance to unload it.
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William4u
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Re: Fidelity Contrafund

Post by William4u »

flyingaway wrote:Contrafund has been recommended in many articles related to retirement accounts, and was claimed to beat S$P500 for many years. I had it before I knew anything about index funds and boglehead stuffs. I got rid of it after I understood the index funds and never regretted. Even in my wife's account with just S&P500 index, I used it to replace the Contrafund.
Contrafund has significantly underperformed Total market Index for both the last 5 years and the last year.

Over the last 5 years, Contrafund has returned 65.95%, and Total Domestic has returned 79.15%. In other words, Total Domestic has more than a 20% higher return than Contrafund over the last 5 years.

Over the last year, Contrafund has returned 8.68%, and Total Domestic 13.08%. In other words, Total Domestic has more than a 50% higher return than Contrafund over the last year. 50%!

(Fun math: if X went up 5% and Y up 7.5%, Y had a 50% higher return than X)
inbox788
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Re: Fidelity Contrafund

Post by inbox788 »

William4u wrote:
flyingaway wrote:Contrafund has been recommended in many articles related to retirement accounts, and was claimed to beat S$P500 for many years. I had it before I knew anything about index funds and boglehead stuffs. I got rid of it after I understood the index funds and never regretted. Even in my wife's account with just S&P500 index, I used it to replace the Contrafund.
Contrafund has significantly underperformed Total market Index for both the last 5 years and the last year.

Over the last 5 years, Contrafund has returned 65.95%, and Total Domestic has returned 79.15%. In other words, Total Domestic has more than a 20% higher return than Contrafund over the last 5 years.

Over the last year, Contrafund has returned 8.68%, and Total Domestic 13.08%. In other words, Total Domestic has more than a 50% higher return than Contrafund over the last year. 50%!

(Fun math: if X went up 5% and Y up 7.5%, Y had a 50% higher return than X)
Where are you getting these numbers? Yahoo doesn't take into account dividends/distributions, and FCNTX has significant year end distributions.
https://ca.finance.yahoo.com/q/bc?s=VTI ... =l&c=fcntx

I quoted some numbers earlier in this thread, and I now believe they're inaccurate, too. I was using Google Finance to track, and I think some dividends are being ignored. I did some manual comparisons using Morningstar, and Contrafund did better, so I may have lost by switching out of Contrafund, not gained, but in either case, small difference overall.

Today: XNAS:FCNTX:19,573.33 S&P 500 TR USD:19,381.23 ARCX:VTI:19,471.60

All three, FCNTX, VTI, and SP500 nearly doubled in 5 years, with FCNTX slightly beating VTI and VTI slightly beating SP500. Longer term, difference might be slightly more, but I don't expect too much difference. I am betting VTI will be the long term winner going forward, despite FCNTX historically outperforming and whatever factors (luck, skilled stockpickers, timing, risk, etc.) will revert towards the mean and handicapped by the higher ER.

http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D
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nedsaid
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Re: Fidelity Contrafund

Post by nedsaid »

scotthew wrote:I need some handholding here to persuade me to sell a large position in FCNTX and move over it over to an index fund. FCNTX has treated me well since 2003, and I have no complaints (except for the fees being 0.6%). It is about 9% of my overall portfolio, the rest being predominantly low cost index funds (four fund portfolio essentially). I like the idea of taking a risk to achieve a higher return on the small part of the portfolio, but in my early 40's not really too confident in this approach any more. Chime in, Bogleheads.
If I held such a fund as Contrafund, I would be inclined to keep it. As other posters have mentioned, Will Danoff will retire someday and the fund has become very large. Thus the case for keeping it is weaker than it was years ago. It is much harder for a large fund to beat the averages than a smaller fund. The purely rational decision would be to just make the switch. I have been stung so many times having the investments I sold outperform the investments I bought to replace them that I would be reluctant to pull the trigger and sell.
A fool and his money are good for business.
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William4u
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Re: Fidelity Contrafund

Post by William4u »

inbox788 wrote:
William4u wrote:
flyingaway wrote:Contrafund has been recommended in many articles related to retirement accounts, and was claimed to beat S$P500 for many years. I had it before I knew anything about index funds and boglehead stuffs. I got rid of it after I understood the index funds and never regretted. Even in my wife's account with just S&P500 index, I used it to replace the Contrafund.
Contrafund has significantly underperformed Total market Index for both the last 5 years and the last year.

Over the last 5 years, Contrafund has returned 65.95%, and Total Domestic has returned 79.15%. In other words, Total Domestic has more than a 20% higher return than Contrafund over the last 5 years.

Over the last year, Contrafund has returned 8.68%, and Total Domestic 13.08%. In other words, Total Domestic has more than a 50% higher return than Contrafund over the last year. 50%!

(Fun math: if X went up 5% and Y up 7.5%, Y had a 50% higher return than X)
Where are you getting these numbers? Yahoo doesn't take into account dividends/distributions, and FCNTX has significant year end distributions.
https://ca.finance.yahoo.com/q/bc?s=VTI ... =l&c=fcntx

I quoted some numbers earlier in this thread, and I now believe they're inaccurate, too. I was using Google Finance to track, and I think some dividends are being ignored. I did some manual comparisons using Morningstar, and Contrafund did better, so I may have lost by switching out of Contrafund, not gained, but in either case, small difference overall.

Today: XNAS:FCNTX:19,573.33 S&P 500 TR USD:19,381.23 ARCX:VTI:19,471.60

All three, FCNTX, VTI, and SP500 nearly doubled in 5 years, with FCNTX slightly beating VTI and VTI slightly beating SP500. Longer term, difference might be slightly more, but I don't expect too much difference. I am betting VTI will be the long term winner going forward, despite FCNTX historically outperforming and whatever factors (luck, skilled stockpickers, timing, risk, etc.) will revert towards the mean and handicapped by the higher ER.

http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D
I got my numbers from google finance. I guess M* is more accurate then?
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William4u
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Re: Fidelity Contrafund

Post by William4u »

Here is Morningstar's data from today. It shows Vanguard Total Market beating Fidelity Contrafund over the last 5 years by quite a bit. I don't understand why both Google Finance and Morningstar show Contrafund underperforming, and your data shows otherwise.

Contrafund (5 Year Return Chart)...
http://quotes.morningstar.com/chart/fun ... 2%3A955%7D

Vanguard Total Market (5 Year Return Chart)...
http://quotes.morningstar.com/chart/etf ... 2%3A955%7D
inbox788
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Re: Fidelity Contrafund

Post by inbox788 »

William4u wrote:Here is Morningstar's data from today. It shows Vanguard Total Market beating Fidelity Contrafund over the last 5 years by quite a bit. I don't understand why both Google Finance and Morningstar show Contrafund underperforming, and your data shows otherwise.

Contrafund (5 Year Return Chart)...
http://quotes.morningstar.com/chart/fun ... 2%3A955%7D

Vanguard Total Market (5 Year Return Chart)...
http://quotes.morningstar.com/chart/etf ... 2%3A955%7D
I think NAV doesn't include dividends. See the sharp drops in NAV in Dec. Making accurate comparisons taking into account dividends, expenses, fees, etc. is challenging. And comparing one's personal portfolio with regular additions or withdrawals in the middle of the year make it even more challenging and next to impossible.
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William4u
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Re: Fidelity Contrafund

Post by William4u »

They sure do make it hard to do comparisons. I wish there was a simple place to look at returns that includes Dividends and fees, but I guess that get a little complicated. Maybe someday google finance or someone else will include a button to toggle this.
inbox788
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Re: Fidelity Contrafund

Post by inbox788 »

FYI, noticed this December 29, 2014 article "Fidelity Contrafund sells energy stocks, buys Southwest, FedEx". http://finance.yahoo.com/news/fidelity- ... 36563.html

So how this active management done YTD?
2015-01-02 thru 2015-05-01
VTI +1.12% CLR +35.11% NBL +6.61% LUV +0.33% FCNTX +3.29% FDX -3.02% (had to type these in; morningstar allows cut/paste)

https://www.google.com/finance?chdnp=1& ... qQH-kYCICg

(may not be correctly adjusted for fees and dividends)

Good news is FCNTX outperformed VTI by about 2%. Bad news is that they would have done better keeping CLR and NBL over LUV and FDX. How they beat the index may have come from other holdings they kept or better switches than the one here.
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I Palindrome I
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Re: Fidelity Contrafund

Post by I Palindrome I »

William4u wrote:... I wish there was a simple place to look at returns that includes Dividends and fees, but I guess that get a little complicated. ...
Isn't that what you get when you change from Price to Growth in the drop-down menu in the upper-left corner of the interactive fund charts? (not available for ETfs) Take your first link, switch to growth, punch in a comparison fund like VTSMX, and compare. Unless I'm mistaken, which is quite possible.
inbox788
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Re: Fidelity Contrafund

Post by inbox788 »

Ford to drop Fidelity Contrafund from employee retirement investment options
http://www.cnbc.com/2015/08/14/ford-to- ... tions.html

Wow, almost $1B sucked out of Contrafund! More wow, it's a fund over $100B, so that is less than 1%.

Recent history show its AUM is up/down several billion any given month, so they will hardly notice the huge exit unless it drives a whole lot of followers.

http://www.fundmojo.com/mutualfund/fund ... fund/FCNTX

FWIW, I pulled out last year, and as I kept tracking, I think I'm lagging, but no regrets. I think my current AA without Contrafund is more conservative.
larmewar
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Re: Fidelity Contrafund

Post by larmewar »

I had a small stake in FCNTX from 2004 to early 2013. Main reasons for getting out were asset bloat, dwindling small/mid cap allocations and over allocation to Apple.

Lar
danaht
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Re: Fidelity Contrafund

Post by danaht »

I have a small position in Contrafund in my Roth that I have held since 2001. I noticed the expense ratio has increased recently to .71%. So, now I am tempted to sell it - and buy a combination of ITOT, IEFA, and IEMG in it's place. The early thread's in this post indicated the expense ratio was .61%. Is there any place where you can find a history of the expense ratio for a fund? It seems like that appears to be very difficult to find.
bandaidman
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Re: Fidelity Contrafund

Post by bandaidman »

My 3 main "speculative" domestic funds are cap op, primecap and the contra fund. I am pleased with all three.

Most of my portfolio is invested in index funds, but I think there will be a small role for "stock picking" in the next decade. The expense ratio makes contra and Cap op a wash in the near term. the heavy health care weighting of the vanguard funds is my main concern with them currently.
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