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Strategies & Market Trends : Value Investing
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To: Wallace Rivers who wrote (10970)7/20/2000 9:20:31 PM
From: Michael Burry1 Recommendation  Read Replies (3) of 78704
 
Wallace, you have a difficult task. There are no good value benchmarks. There are benchmarks. S&P Barra. Russell. You could even use the Vanguard or Schwab Value Index funds for un-managed but more realistic performance. BUT all these do is take the slowest growing, most depressed big-caps and through them togetther. I think most value investors would agree that there is not much reason to call that value investing.

Your best bet is to pick some active managers in the value category and pit them against your manager. Say Legg Mason Focus Trust. Say Third Avenue Value. Say Tweedy Browne. Say
Sequoia. There's a bunch of them. Maybe you can take an average of 10 or so of these over different time periods.

I just use the S&P 500 to benchmark myself. The simple reason is that it is by far the easiest, cheapest index to invest in, and it has shown its ability to pound into the ground just about every mutual fund manager out there over time. And you're just as likely to find a correlation with what true value investors do as you are by picking a big so-called value index.

To me benchmark means alternative. Any number of active managers, individually or as a group, could be. But then
of course you get into past performance issues and that
whole mess...Good luck.

Mike
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