Guru Returns Show Just How Tough the Going Has Been Lately

GuruFocus.com is a web site devoted to the principles of 'value investing'. They follow the trades of legendary money managers and keep track of their results over 6-month, 12- month and longer term periods.

 

If you haven't been having a great time in the market since last spring, you may take some consolation by seeing how many 'fund managers of the year' and other top-notch investors have been faring over the recent past. Even Warren Buffett is now in negative territory for both the 6 and 12-month periods just ended.

 

I wouldn't bet against any of these guys rebounding in a big way once the market picks up in the future.

 

All data is as of June 27, 2008:

 

Manager…………………. 6-months ……………..... 12-months

 

Marty Whitman ………..  ( - 43.38% ) ………………( - 34.61% )

Mohnish Pabrai ………...  (- 41.20% ) ………………( - 36.88% )

Bill Miller ……………… ( - 37.05% ) ……………... ( - 40.90% )

Joel Greenblatt ………… ( - 37.00% ) ……………… ( - 37.00% )

Eddie Lampert ………… ( - 28.95% ) ……………… ( -33.94% )

Robert Bruce ………….. ( - 25.00% ) ………………. ( - 19.16% )

Bruce Sherman ………… ( - 24.68% ) ……………… ( - 30.55% )

Charles Brandes ……….. ( - 24.58% ) ……………… ( - 29.51% )

Robert Rodriguez ……… ( - 22.20% ) ……………… ( - 17.75% )

Mark Hillman ………….. ( - 21.53% ) ……………… ( - 25.40% )

Carl Icahn ……………… ( -21.00% ) ………………. ( - 3.98%)

Edward Owens ………… ( -20.94% ) ………………. ( - 16.74%)

Irving Kahn ……………. ( - 20.75% ) ………………. ( - 24.68% )

Brian Rodgers …………. ( -20.48% ) ……………….. ( - 24.68% )

Arnold Schneider ……… ( -20.39% ) ……………….. ( - 27.25% )

Bill Ackman …………… ( - 19.38% ) ………………. ( - 23.06% )

Chris Davis ……………. ( - 19.17% ) ………………. ( - 19.75%)

Bill Nygren ……………. ( - 17.80% ) ………………. ( - 27.96% )

Richard Snow …………. ( - 17.68% ) ………………. ( - 19.77% )

Hotchkis & Wiley …….. ( - 17.28% ) ………………. ( - 25.02% )

Richard Pzena ………… ( - 16.27% ) ………………. ( - 25.22% )

David Dreman ………… ( - 15.82% ) ……………… ( - 11.87% )

Tweedy Browne ………. ( -14.73% ) ………………. ( - 17.23% )

Arnold Van Den Berg … ( - 14.67% ) ……………… ( - 22.32% )

Robert Olstein ………… ( - 14.46% ) ……………… ( - 21.05% )

Wally Weitz …………… ( - 14.31% ) ……………… ( - 23.00% )

Third Ave. Mgt. ………. ( - 13.84% ) ………………. ( - 11.83% )

John Rodgers …………. ( - 13.57% ) ………………. ( - 21.47% )

Mason Hawkins ………. ( - 13.51% ) ……………… ( - 20.88% )

Dodge and Cox ……….. ( - 13.17% ) ……………… ( - 15.01% )

Bruce Berkowitz ……… ( - 12.26% ) ……………… ( - 3.68% )

David Swensen ……….. ( - 12.19% ) ……………… ( - 12.23% )

Ron Baron …………….. ( - 11.70% ) ……………… ( - 12.80% )

Ian Cumming ………….. ( - 11.05% ) ……………… ( - 11.68% )

David Tepper ………….. ( - 10.68% ) ……………… ( - 14.87% )

Jean-Marie Eveillard ….. ( - 10.62% ) …………….… ( - 7.23% )

NWQ Managers ………. ( - 10.46% ) ………………. ( - 13.39% )

Ron Muhlenkamp …….. ( - 9.58% ) ………………… ( - 13.39%)

Glenn Greenberg ……… ( - 9.45% ) ………………… ( - 15.22% )

Michael Price …………. ( - 9.26% ) ………………… ( - 13.87% )

Tom Gayner ………….. ( - 9.19% ) …………………. ( - 17.50% )

Richard Aster ………… ( - 6.73% ) …………………. ( - 5.00% )

George Soros …………. ( - 6.56% ) ………………… ( - 9.43% )

Ruanne Cunniff ………. ( - 6.40% ) ………………… ( - 10.61% )

David Einhorn ………... ( - 5.91% ) …………………   + 3.18%

Chuck Akre …………… ( - 4.00% ) ………………… ( - 11.08% )

Warren Buffett ……….. ( - 4.00% ) …………………. ( - 3.60% )

Comments

[archman82011]

Idiotic terms:

<<legendary money managers>>
<<'fund managers of the year'>>
<<top-notch investors>>
<<guru>>

These statements, are a true representation of exactly what is wrong with the whole mutual fund industry.

Other than a few people such as Buffett, Whitman, and a handful of others, most of the people on your list deserve to be there.

Why?
Because they absolutely suck at managing money in the first place.

Morningstar, others, etc, have done a complete brainwashing job on people by using terms such as "legendary" , "guru", etc.

These people are not good "money managers". They can essentially only make money in bull markets, and have no idea how to manage money in bear markets.

I am sorry, but during bear markets, these so called professionals, you know these people with MBA's, multiple years experience, and an edge over average citizens, should at least be able to keep their fund from losing more than 5% a year during bear markets. There is no excuse for it.

What they are:
They are"asset gatherers", who with the help of bold faced lying outfits such as Morningstar, do everything they can to convince people to stay or get into the market. They keep collecting their fees, getting very wealthy, regardless of how well the fund does, while the average american only gets the "returns" for how they mis-handle the money.

Any dope, can make money in a bull market.

The true test of an asset manager is how they preserve wealth during bear markets.

Bill Miller of Legg Mason is truly one of the worst long term fund managers out there. The hype surrounding him and his non-sensical beating of the S & P 500 for years is a joke. His fund, now down 28% for 2008 is exactly where it was back in early 1997 in terms of return.
That is completely unacceptable!!
Though he "beat" the market during the 2000-2003 bear market, he essentially lost just as much as the averages, yet he "beat" the averages by a percent or two.
HA HA. What a joke. So instead of losing 28% a year he lost 26% a year. Don't worry though, he and all the other asset gathers on the list are still getting paid, have millions upon millions in their own personal bank accounts, and more toys to play with than you or I will ever have. All from fees they charge regardless of their returns. Wow, sign me up for that job.

Bottom line IMHO for current mutual fund investors: Own low expense ETF's, and learn to preserve wealth during bad times.

I personally invest in individual stocks, not ETFs, however ETF's are a better alternative to mutual funds if one does not have the time to invest in individual stocks.

And just so no one (including the author) thinks I have an axe to grind:
I have been investing for 15 years. I have managed my own money for that period. I self educated myself about investing. I do not manage money for a living, and I have no MBA. I am just a simple self employed businessman.

What I do have is a 20% annualized, 15 year portfolio return, with only one losing year, 2002 down 4%. I am not bragging and I hope everyone here, has that as well.

My point: You do not need these so called "gurus", who are nothing but bold faced lying "asset gathers" to manage your money.

Most of those people are destroyers of wealth and should be returning money out of their own pockets to mutual fund holders

[bluesmoke]

It does seem very suspect how these "experts" are all down so much this year. Like the reader above, I have spent years in the trenches and have a better report card to show. I also still believe in mutual funds. There is always a market somewhere, you just have to do your homework.

[archman82011]

I agree with bluesmokes statement "There is always a market somewhere, etc".

If the market bottomed tomorrow, and we entered a full fledged bull market all those "gurus" funds would be going up, not because they are good managers. No. Simply because the direction of the overall market is up, not down.

Again to my point, those on the "guru" list, save for a few of them, should be put up against a wall a threatened with a firing squad if they don't return all the fund holders money they lost during not so good markets. I understand the legal statements "past results are not indicative of future returns", etc, however, alot of these "gurus" simply havent lost a few dollars over the years. Alot of these clowns have lost ALOT of money over the years.

Shameful.

[SA2]

Archman80211:
"The true test of an asset manager is how they preserve wealth during bear markets." - absolutely agreed!

As for Morningstar - that is a shameful outfit that protects its income stream by creating this glorified "guru" culture and pushing unknowing people to invest in yesterday's "top performers" while it is absolutely clear that a portfolio of inexpensive index funds / ETFs will do a far superior job of growing and protecting the interests of the people seeking Morningstar's advise. Morningstar will rate the funds with stars based mainly (only?) on their past performance promoting a culture of rear-view-mirror expensive investing.

Shameful indeed.

[GreenestEgg]

In all fairness, a lot of these fund managers are tied to holding investments during market downturns. Holding portfolios of 30% cash and 50% commodities goes against the mission of what they promised there investors. Also, it isn't necessarily legal to dump 20% of the shares of a company in a single day.

That said, they could do a better job of diversifying their holdings so that folks didn't lose a third of their life savings in a year (e.g. Vanguard Windsor / Capitial Value, etc). But hey, they were 4 or 5 stars when you bought 'em, right? Thanks morningstar.

If you know there's going to be inflation, buy stock in mining companies. If you know there's going to be a food shortage, buy ADM & Monsanto. If you know oil is going to $130/bbl, get out of GM and into Toyota. If you know that the mortgage industry was a house of cards and that eventually you'd have huge defaults on loans and credit cards, don't hold stock in the financials. This isn't hindsight. It's due diligence when you're investing (not gambling) with peoples' retirement accounts.

[truthinvesting]

Pleas donot attribute Lou Simpson's untimely picks with WEB.WEB has made 4 big investments in the last year BNI JNJ KFT and WFC and 3 are vry profitable and 1 is earning him a nice dvidend while he waits for it to go up. Buffett top 7 investments which was 72 % of his portflio is down 4 billin since January 1s but his UNREALIZED CAP GAINS have dropped from 27 billion to 23 billion.I do'nt think he is"swaeting"...

Please get your facts straight next time

[Paul Price]

If Buffett gives money to someone else to run on his behalf then then results are his in the same way that 'look through' earnings on companies he doesn't run personally are his.

[Rohan]

Robert Rodriguez is down 22% this year? I'd like to see the data source for that...his FPA Capital fund is up 5%. I'm guessing there isn't a 27% divergence between the mutual fund and the separate accounts.

Further, Marty Whitman's had a pretty well publicized bad bet against Ackman on the bond insurers, but his Third Avenue Value Fund is only down 17% or so YTD. Not sure where the -40%-esque numbers are coming from.

Makes me question most of the data on this list.

Lastly, those of you who expect a fund manager to outperform in every market are just short sighted. Judging a manager based on short term performance, which is exactly what you're doing in criticizing year-to-date numbers, is hogwash. What are you going to take, Greenblatt's 40% annualized for 15-20 years, or a 6-month figure heavily weighted by an AXP holding that may well double in the next 2 years? I'm not arguing that every one of these managers is beyond reproach, but it seems like there isn't a single commenter on this list who comprehends an ounce of Benjamin Graham's teachings.

[Paul Price]

Use this link to see the source data:

www.gurufocus.com/scor...

[Rohan]

Ok, from your link it appears that this isn't the manager's results over the 6 and 12 months, just the "average gain/loss" of the stocks purchased over the period. On a surface scan it doesn't appear to give any weight to position sizing, let alone positions already held.

So Ken Heebner's numbers, for instance, appear to track relatively closely to what he's actually turned in. That makes sense since he turns over his portfolio 3-4x a year, so recent purchases are actually indicative of his overall fund.

Still, though, position sizing matters. Joel Greenblatt's number above is entirely based on a tiny purchase of ODP.

["Fake" Marty Whitman]

Dear Paul Pierce, Gurufocs.com & SeekingAlpha.com,

Given that your "article" has circumnavigated the World Wide Web numerous times and landed in my inbox more than I care to count, I felt that given that I am widely regarded as one of the best investors of all time, I'd write in and offer up some free advice (did you see my reference to "best investor of all time", I'd pay attention to the next part if I was you). Your "article" represents all that is wrong with the internet - namely any dolt that has access to a keyboard and the internet can publish "news" or "research" (I use the word "dolt" only as a means to educate of course).

Even a cursory look at the list highlights how little "research" any of you actually did in either preparing or enabling the publishing of this "information"... And that ladies and gentlemen is lesson #1: Do your own work, don't rely on someone elses "research". Case in point: my name was at the top of the list, further down is the name of the firm I founded and am still Chairman - Third Avenue. Now how could that be? I have just about all my own money in my firm's funds (this is lesson #2 boys and girls - invest your own money alongside your clients), so how could I do demonstrably worse than the very funds I'm invested in, much less be mentioned, in effect, twice on the same list with two different results? Curious no? Now all three offending parties will no doubt argue, "the information was obtained using publicly filed 13F filings.". While that may be true, here's a lesson on 13F's, so pay attention. 1) they are delayed filings and 2) they contain incomplete information because there are various reasons why 13F's are filed under different legal entities. A more detailed explanation is really only for the advanced class, for which none of you qualify.

Fortunately for even the most novice and lazy (I'm referring to you three here) there is a way to get more accurate information and this leads to lesson #3 of the day - Why be a dolt when perfectly accurate public information is available to you. And what is that perfect info I am referring to you may ask? Well, a good percentage of the managers on your list manage, wait for it, publicly available mutual funds! These little gems are priced daily, they have perfect information about the managers' track records and oh, did I mention, they are publicly available every single day of the year! And by they way, these little doosies aren't new to finance, they've been around for decades! So it should come as no surprise that my 1O year old neice (yes, she got an email with a link to the list too) was shocked to see that "Uncle Bob" Rodriguez was, according to your list, down 22.2% when the portion of her college fund invested in his FPA Capital Fund (FPPTX) was actually up 5.4% through June 27th. Same too for a number of her other investments, Bruce Berkowitz’s Fairholme Fund (FAIRX), Robert Bruce’s Bruce Fund (BRUFX), Ron Muhlenkamp’s Muhlenhamp Fund (MUHLX), etc, etc. An interesting note here, not one of your ‘reported results’ was accurate. (By the way, my neice’s college fund is kicking butt, you should consider letting her manage your money, she does her homework and she's undoubtedly doing better than any of you). Also of note, some of these managers run public companies, such as my dear friend Ian Cumming (you can simply get all his knowledge for free buy purchasing Leucadia National Corp, ticker LUK, which was down less than 1% through the 27th).

Look, when one of the greatest investors of all time is offering you some advice your ears should perk up (did I mention "greatest of all time"), so pay attention to the these lessons and shame on all of you for publishing this misinformation. By the way, have I mentioned what a good buy my Third Avenue Value Fund is? Its holdings are ridiculously cheap right now, I'd recommend making an investment rather that trade based on my 13f's.

Happy Investing,

"Fake" Marty Whitman

[peter xyz]

Dear "Fake" Marty,

My condolences on topping the list of the biggest losers. You seem comfortable in your contrarian position, however if it bothers you next quarter, here is my "proprietary, patent pending methodology" to get your name at the other end of the list

Next quarter,
1. wait until the last week of the quarter, look at the list of the biggest gainers for the quarter, and
2. go buy a bunch of them to add to your 13F. At first glance the methodology doesn't seem to be sensitive to weightings, so its probably okay to buy $100 each of the latest fad
3. profit (well at least make sure that Paul posts an update on SeekingAlpha touting your 5000% return for the period)

disclaimer:
This method may be so successful that you might have to close your funds again
May not comply with all relevant ethics rules and principles in your jurisdiction
On the internets no-one can tell that I'm actually a cat

[johnson12]

Agree with the last two posts. Very shoddy and misleading analysis done here. Does Paul work for the NY Times, by any chance?

[User 94487]

This list of performance is junk, since it appears to be based only on a static view of publicly disclosed long positions on 13-Fs.

Thus it excludes the results of short positions, and the results of any changes made to the long portfolio since disclosure. 13-Fs also do nto show the results of securities not required to be disclosed on 13-Fs, ie non-US securities.

Also, the 13-Fs ignore the case position, which in the case of FPA is very significant.