Bob Markman

Learning From Bill Miller's Recent Underperformance

Aside from the unneeded ad hominen attack on Miller, Jack Swanson is right about Ken Heebner, one of my personal investment heroes. As fund manager myself (MTRPX) (outperforming 96% of my ;arge cap growth peers over the past five years) I know from practical experience that low turnover buy/hold managers almost inevitable revert to the mean. Heebner has been criticized--wrongly--b... ignorant observers who decry his mad bomber high turnover concetrated style. The reality is that he has forgotten more about investing than most 'pundits' ever knew. Especially the English Lit majors at Morningstar. It is my unceonventional belief that a good track record accopaied by high turnover is much more projectable into the future than a good record acheived with low turnover. Why? Ask yourself, which .300 hitter would you send up to pinch hit in the bottom of the ninth: the one who is 3 for ten, or the one who is 50 for 150? More sucessful data points give you a better chance at future results, right? The fund industry rpomotes low turnover solely because most successful funds are simply TOO BIG to move rapidly and frequently. It like the 350 pound guy who pooh-poohs working out--not bacause its bad, but because he couldn't do it even if he wanted.