Author Topic: Fund managers who blew up their performance over the years  (Read 7918 times)

yadayada

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Re: Fund managers who blew up their performance over the years
« Reply #10 on: September 11, 2014, 07:24:45 AM »
the amount of short term and results oriented thinking in this world is mindblowing. I know we are a bunch of animals that are not wired for that because it did not serve our purpose of survival. But still. Some one time event this year? Oh let's pretend next year does not exist. Only this year counts.

An average? WHATS THAT? NEVER HEARD OF IT. Luck? Never heard of that concept either.


CorpRaider

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Re: Fund managers who blew up their performance over the years
« Reply #11 on: September 11, 2014, 07:55:17 AM »
Could some of the reason for the Morningstar downgrades be because the funds attracted flows, got bigger, and they had to change the sorts of stocks they were in?

some of that.  Also the star ratings care a lot about vol.

True.  FAIRX is good example of that.

longinvestor

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Re: Fund managers who blew up their performance over the years
« Reply #12 on: September 11, 2014, 09:09:10 AM »
  Pretty much any long-only manager of any style who has good ten year plus numbers has a 1,3, and 5 period where they meaningfully underperformed.  Many managers who had great 1, 3 and even 5 year numbers when looked at on a ten year basis were nothing more than coin flippers.

This is basically because no process works all of the time. No style or philosophy.

Why should the mutual fund manager's lack of process or performance become the fund investee's problem? Buffett is exactly correct in suggesting that the average investor who does not have the time or inclination to pick investments would be best served by putting most of their money in a low cost index fund. Again, excessive fee avoidance is the soundest, simplest strategy for most.


topofeaturellc

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Re: Fund managers who blew up their performance over the years
« Reply #13 on: September 11, 2014, 09:33:57 AM »
  Pretty much any long-only manager of any style who has good ten year plus numbers has a 1,3, and 5 period where they meaningfully underperformed.  Many managers who had great 1, 3 and even 5 year numbers when looked at on a ten year basis were nothing more than coin flippers.

This is basically because no process works all of the time. No style or philosophy.

Why should the mutual fund manager's lack of process or performance become the fund investee's problem? Buffett is exactly correct in suggesting that the average investor who does not have the time or inclination to pick investments would be best served by putting most of their money in a low cost index fund. Again, excessive fee avoidance is the soundest, simplest strategy for most.
Huh?  I'm not sure what point you think I'm trying to make?   When you are looking at active managers you've already made the decision to invest actively.

And that fact that BRK itself has trailed the market for certain periods of time is itself evidence of what I am trying to say.

opihiman2

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Re: Fund managers who blew up their performance over the years
« Reply #14 on: September 11, 2014, 01:04:00 PM »
Interesting posts.  I semi-agree about Heebner.  I like his investing style and he's a good manager overall.  His long term performance is still pretty good.  But, I remember back in the day when people were jumping into his funds after a string of stellar performance.  It just reminds me of the obligatory caveat emptor: past performance is not indicative of future performance.

edit:

It doesn't seem very clear, but TAM blew up their fund and went from 33% CAGR to 10+% CAGR.  Not 10% since 2008.  That might imply their CAGR is still in the 20+%.
« Last Edit: September 11, 2014, 01:11:15 PM by opihiman2 »

peter1234

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Re: Fund managers who blew up their performance over the years
« Reply #15 on: September 11, 2014, 01:08:13 PM »
Interesting posts.  I semi-agree about Heebner.  I like his investing style and he's a good manager overall.  His long term performance is still pretty good.  But, I remember back in the day when people were jumping into his funds after a string of stellar performance.  It just reminds me of the obligatory caveat emptor: past performance is not indicative of future performance.

Agreed.

I remember reading that his investors had bad performance even when his funds were doing well.

Since his funds were so volatile, they perfectly bought high and sold low.
 :'(

randomep

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Re: Fund managers who blew up their performance over the years
« Reply #16 on: September 12, 2014, 11:24:27 AM »
Sellers Capital

+1, I think his one gets a lot of publicity because the manager was so frank despite this fund blowing up.

Amaranth Advisors

topofeaturellc

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Re: Fund managers who blew up their performance over the years
« Reply #17 on: September 12, 2014, 11:52:01 AM »
Interesting posts.  I semi-agree about Heebner.  I like his investing style and he's a good manager overall.  His long term performance is still pretty good.  But, I remember back in the day when people were jumping into his funds after a string of stellar performance.  It just reminds me of the obligatory caveat emptor: past performance is not indicative of future performance.

Agreed.

I remember reading that his investors had bad performance even when his funds were doing well.

Since his funds were so volatile, they perfectly bought high and sold low.
 :'(

That's pretty much a characteristic of every high performing manager.  People tend to invest at the end of the run, not the beginning, and tend to pull assets out up until the underperformance ends.

stahleyp

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Re: Fund managers who blew up their performance over the years
« Reply #18 on: October 10, 2019, 02:48:45 PM »
CGMFX performance history is wild.

From inception in 1997 the fund has out performed the S&P 500. $10,000 invested in CMGFX would now be about $57,000 vs $46,500 for S&P 500 index fund. Pretty good!

However, if we look back in 2008, that $10,000 investment would have been worth over $101,600 vs about $16,000 for index fund!! Absolutely incredible! The level of out performance and under performance during the first 10 or so years and last 10 or so is probably unparalleled for a mutual fund.
Paul

Spekulatius

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Re: Fund managers who blew up their performance over the years
« Reply #19 on: October 10, 2019, 03:39:17 PM »
CGMFX performance history is wild.

From inception in 1997 the fund has out performed the S&P 500. $10,000 invested in CMGFX would now be about $57,000 vs $46,500 for S&P 500 index fund. Pretty good!

However, if we look back in 2008, that $10,000 investment would have been worth over $101,600 vs about $16,000 for index fund!! Absolutely incredible! The level of out performance and under performance during the first 10 or so years and last 10 or so is probably unparalleled for a mutual fund.

The problem with those kind of performances track records is that they outperform when the fund is small and underperform when the fund is large (from fund inflows). When you look at the total amount money gained and lost, CMGFX lost their customers money on average, relative to an index fund.
To be a realist, one has to believe in miracles.