Today's Price

[KevD]

Hi,
First-time poster, long-time lurker at the Boglehead's.  Really appreciate the work of everyone who contributed to that thread (special kudos to MediumTex), and thank-you Craig for all the work you do in keeping Harry's vision alive. 

I hate for my first post to be as lame as asking about price, but I bought my first batch of PRPFX recently (taking baby steps before graduating to full-strength PP), and today's price doesn't seem to match the internal components.

Today, PRPFX was down -.40% but the following were up:

gold (up BIG)
silver (up BIG)
stocks (using VTI as proxy)
bonds (using TLT as proxy)
cash (using SHY as proxy)
real estate (using IYR as proxy)

The Swiss Franc was down a slight amount, but it's a small part of the portfolio.

I thought there might have been a distribution, but those are usually in December.

Would appreciate any help here.  I'm trying to understand how it works, and it's hard when the prices don't seem to match up. 

Thanks,
KevD

[MediumTex]

You will notice with PRPFX that sometimes when it looks like it should be WAY down for a day (like yesterday), it will only be down a little, but then the next day it will be down a little more, even if the market that day looks like it should have been up.

I have noticed this with PRPFX over the years.  I don't know why this happens, because on up days it seems to include all gains for that day in that day's price.

I have a spreadsheet that track my PP against PRPFX and I notice on down days it will take PRPFX a couple of days to reflect one day of losses in my PP.

For example, my PP was up today, while PRPFX was down, but my PP was down more than PRPFX yesterday.  As I mentioned above, i have noticed this many times.

It's probably some quirk in the way PRPFX values its assets.

[KevD]

Thanks Tex.  I won't worry about it then.

[Storm]

With a lot of mutual funds, the price you see today is actually the price from yesterdays close.  I'm not sure if PRPFX is this way, since I don't hold it, but it could explain the dip.  The day before yesterday there was a correction in precious metals towards the end of the day and prices dropped.

[foglifter]

Adding to Storm's note: I noticed that there is a lag between the market close and the moment Yahoo Finance and probably other financial sites display the latest price for mutual funds. My observations show that the price gets updated about 3 hours later, around 7pm EST.

[MediumTex]

Adding to Storm's note: I noticed that there is a lag between the market close and the moment Yahoo Finance and probably other financial sites display the latest price for mutual funds. My observations show that the price gets updated about 3 hours later, around 7pm EST.

CNBC tends to post mutual fund prices around 100 minutes after the market closes, while Yahoo Finance tends to post them about 10-15 minutes later.

Not that I've watched that closely or anything. 

[smurff]

I had a serious discussion last week with my brokerage about late mutual fund prices.  The tense discussion started because I noticed the price change for my overall portfolio did not match the changes in net asset value shown for individual funds times the number of outstanding shares.

Usually the day's results posted by around 5:30 PM, but lately I had noticed the results coming in at different times.  Results were not available for all my funds until nearly 7:00 PM, three hours after market close.  After we discussed it calmly (through their online email system), I told them they might want to be more transparent about reporting all market results.  With everyone and his brother online, and banks co-locating their computers next to the NYSE/NASDAQ computers for speed-of-light HFT, it is normal for the public to expect that  NAVs for mutual funds would be available just after the 4:00 PM close, just as is the case for individual stocks.  But that's not what happens.

I suggested that in addition to posting on their home page something to the effect that the day's mutual fund NAVs can't be made available until some time after the markets close at 4:00 PM and to expect them possibly later in the evening, they also consider posting the DATE the NAV corresponds to beside each fund's result.  That way there would be less confusion about what date a posted price refers to, and investors would have a chance to see whether there are any funds that have a chronic tendency to post late.

They said they'd make the recommendations.

[Storm]

To be honest, I don't think it's your broker's fault.  The fund managers themselves have to track an entire portfolio of securities, and probably don't report their results until sometime after market close.

[MediumTex]

Why does it matter if a brokerage account updates the day's mutual fund value at 5:00 or 7:00?

You have to get any changes in before market close anyway.

Are we just talking about a matter of convenience?  If so, why not just look at CNBC?

[ignatz]

Today, PRPFX was down -.40% but the following were up:

gold (up BIG)
silver (up BIG)

Not so.

On November 10:

Spot gold was down from 1421 to 1390.50, a decline of 2.2% and the primary reason for the fund's decline.

Silver was up, but not big (1.1%), and is only 5% of the portfolio at any rate.

The other components were likely all up, but in small to very small amounts. Bonds (TLT) were up only .14%.

[smurff]

Why does it matter if a brokerage account updates the day's mutual fund value at 5:00 or 7:00?

You have to get any changes in before market close anyway.

Are we just talking about a matter of convenience?  If so, why not just look at CNBC?

Yes, it's convenience, but it is also accuracy.  When an investor looks at an account that shows in the summary that the value increased by $2000 at the end of the day, but the individually posted NAVs for mutual funds show that the value actually increased by $2500, it's cause for concern.  

Storm, it's not that I thought the brokerage was responsible for the data--it's that the data the brokerage reported were not dated, so an investor could not tell at a glance whether it was today's or yesterday's data for a particular fund being reported.  It turns out the reason the results for the above example were off by $500 was they were including only the End of Day data in the summary, but the undated results shown for individual funds were a mix of End of Day and End of YESTERDAY. 

And if a fund manager has been consistently reporting NAVs by 5:00 PM, but suddenly the data start being reported later and later, that might be something worth checking out.  (The time discrepancy may just be noise, but weird Madoff/Black Swan/Reserve Fund/Lehman stuff does happen.)

Look at CNBC?  (Medium Tex is a true comedian.  )

At 6:00 PM on CNBC there's a middle-aged GoldmanSachs alum yelling "Booyah!," banging pots and pans, throwing action figures/dolls and stuffed animals at the audience, operating machines with strange noises, screaming at fans on the call-in line, and otherwise looking as if he has lost his mind--or reverted to toddlerhood.  I like the idea of sanity in the early evening, especially where money is involved.

[MediumTex]

Look at CNBC?  (Medium Tex is a true comedian.   :D)

Sorry, what I meant was that CNBC's website provides mutual fund quotes earlier than some of the other financial websites, and probably much earlier than what is reflected in your brokerage account.

[smurff]

Look at CNBC?  (Medium Tex is a true comedian.   :D)

Sorry, what I meant was that CNBC's website provides mutual fund quotes earlier than some of the other financial websites, and probably much earlier than what is reflected in your brokerage account.

Okay.  I'll check them out.  It would be nice if I could set up separate portfolios to keep track of my PP and VP.

[KevD]

Hi ignatz,

These are the figures from Yahoo, and also match what I was seeing.  (I was watching the market all day):

Nov 10:
PRPFX:  -0.40%
GLD:  +1.20%
SLV:  +2.02%
TLT:  +0.13%
IYR:  +1.18%
VTI:  +0.43%

I don't understand the discrepancy between my numbers and your's. 

[ignatz]

Hi ignatz,

These are the figures from Yahoo, and also match what I was seeing.  (I was watching the market all day):

Nov 10:
PRPFX:  -0.40%
GLD:  +1.20%
SLV:  +2.02%
TLT:  +0.13%
IYR:  +1.18%
VTI:  +0.43%

I don't understand the discrepancy between my numbers and your's.  

Kev:

You used GLD for gold and SLV for silver. Those are ETFs and are not the actual price for the metal. They can and do have various premiums or discounts at any given time on any given day.

I used the closing spot prices for the metal per se. I can't remember where I got silver, but I got gold here:

http://www.usagold.com/reference/prices/2010.html

I am assuming PRPFX prices its metals at the closing spot.

Actually, I think they own a combination of bullion and coins. So a completely accurate accounting would probably use the spot for the bullion portion and some sort of dealer quote of the closing price for American Eagles or Canadian Maple Leafs or whatever PRPFX actually owns. I'd guess the price of gold coins is very highly correlated with the spot, rather than GLD.

For the other stuff, I used Yahoo historical prices.

Initially, I had the same suspicions you did, because I knew some measures of the gold price were up that day--such as GLD.

At any rate, all we can do is guess because we don't know PRPFX's methods.

VTI is likely not a good proxy for stocks held either. That is the broad US market and PRPFX certainly does not own the broad US market. It owns a bunch of natural resource stocks and a bunch of "aggressive growth" stocks, which will not correlate very well with VTI.

I reviewed the PRPFX bond position a week or so ago. TLT is likely not a good proxy. TLT is the long bond. PRPFX owns a mixture of long, short, and medium term Treasuries. The average duration is somewhere in the 5 to 10 year range--considerably shorter than TLT--which would react differently on any given day.

Likewise, IYR is not going to be a highly accurate proxy for the PRPFX real estate holdings.

But I take your point. I don't know all of PRPFX's methods and I am somewhat concerned about Michael Cuggino, the fund's history, and the performance chasing and huge inflows into the fund in the recent past.

Fortunately and intentionally, it is less than 10% of my portfolio. I don't expect it to do well when gold tumbles and I will have to decide what to do at that time--if anything.

And I don't enjoy pondering whether or not PRPFX could actually produce the physical metal it claims to own.  We could find out when people start pulling billions out of the fund as quickly as they have put billions into it recently.

[MediumTex]

To test my thesis that PRPFX somehow spreads losses on a bad day over two days, see if today's closing price doesn't turn out to be less bad than one would think, and see if tomorrow's closing price isn't lower than one would think.