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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: freeus who wrote (44136)	7/5/2001 12:54:47 PM
From: StockHawk	Read Replies (1) of 54805

You would throw cold water on that idea, wouldn't you?... They don't go up as much in up markets but still go up and if you put x dollars into Oakmark Select five years ago... you were up wonderfully Actually, I have an investment in that fund (which is now closed to new investors). It's a small amount of money that I started with in 1997. Today it looks rather brilliant but during 1998 and 1999 it looked pretty poor in comparison to the NASDAQ high flying act. For those not familiar the fund uses a value approach, focusing on a small number of issues at any one time. During the same time period my mother-in-law held an investment with Sanford Bernstein. They are also value investors and they have a semi-annual presentation at the Plaza Hotel in NY to review their results. I went as a guest to quite a few of them and it was always interesting. People in the audience had selected them precisely for their value approach yet as the Nas went up and up and Bernstein's portfolios plodded along investors became more and more vocal with their displeasure on "missing out". You should have heard Bernstein's managers trying to argue that value investing still had merit. Several people practically demanded that Bernstein start a technology fund and that pressure was perhaps one of the reasons they sought to combine with Alliance Capital (at least that's the impression they gave at one of the meetings). No doubt many investors pulled out due to the lackluster returns, and I recall the fund manager at Oakmark Select trying to defend their strategy under the onslaught of similar criticism. Is there a point here? Perhaps it is that many investments go in and out of favor, and the cycles can take years. Unfortunately, the newspapers come out every day, and the obvious stupidity of investing in the wrong thing today is pounded away at endlessly. More and more I am believing that to be successful as a long term investor you either need tremendous patience and unshakeable beliefs, or for mere mortals, a selection of strategies that might compliment each other (ie G&K, S&P 500, value, small caps, etc.). The "put all your eggs in one basket and then watch that basket very carefully" approach is too difficult on the downside making it all too tempting to jump from place to place - usually at the wrong time. StockHawk (with ever more cold water at the ready)

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