Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Condor who wrote (27595)	1/20/2003 2:47:06 PM
From: Raymond Duray	Respond to of 74559

Thanks Condor, Here's another that you may enjoy. Message 18466395 Salaam aleikum, Ray

To: Condor who wrote (27595)	1/20/2003 7:03:06 PM
From: calgal	Respond to of 74559

Funds That Consistently Beat the Market Mon Jan 20,12:40 PM URL:http://story.news.yahoo.com/news?tmpl=story2&cid=568&ncid=749&e=3&u=/nm/20030120/bs_nm/column_funds_dc By Clint Willis BOSTON (Reuters) - The worst losses of the recent bear market are almost certainly behind us, but many observers expect lackluster gains during the coming decade. That makes it all the more important to find funds that can outpace the market averages. Fortunately, there are some worthy candidates out there. For example, Dodge & Cox Stock (800-621-3979; $2,500 minimum investment; no load) has outperformed the index during the past 10- and 20-year periods, and has had positive returns during 10 of the past 11 years. (The fund declined 10.5 percent in 2002, but still managed to beat the Standard & Poor's 500-stock index by 11.6 percentage points). Dodge & Cox Stock's management team looks for mid- and large-cap shares that look cheap based on growth potential and other factors. Recently, the portfolio sported an average price-to-earnings ratio of around 16.7, compared with 29 for the S&P 500. And the expense ratio is a super-low 0.54 percent. Longleaf Partners (800-445-9469; $10,000 minimum; no load), is another consistent performer. The fund has gained 14.1 percent annually during the past 10 years, versus 9.3 percent for the S&P 500. Moreover, its management team has outperformed the S&P 500 by wide margins during each of the past three years. The fund typically invests in stocks trading at sharp discounts to their intrinsic value, employing a concentrated portfolio of 20 to 30 stocks. Legg Mason Value Trust (800-577-8589; $1,000 minimum; no load), sports an even more impressive record of consistent performance. What's more, that record offers some insights into the types of investment approach that are likely to make money for investors during the coming years. Manager Bill Miller took over sole management of the fund back in November 1990. The economy was slow and stocks were slumping, and a president named George Bush was pondering war with Saddam Hussein (news - web sites). In other words, the environment was a lot like the one investors face today. Miller proceeded to beat the S&P 500 for 11 straight years, thrashing former Fidelity Magellan manager Peter's Lynch's previous record of seven. Value Trust during the 11 years through December 2002, out-gained 98 percent of its competitors. Although Value Trust fell 18.9 percent in 2002, the fund's performance was 3.1 percentage points ahead of the S&P 500 -- and there is reason to believe that Miller will outpace the market and his peers during the coming years. Miller's current portfolio reflects a contrarian streak worthy of the most devout value investor: Value Trust holds some of the stocks hit hardest by earnings setbacks in 2002. Miller also has been seeking out stocks that pay above-average dividends -- another traditional target of value mavens, who see high yields as a sign of low valuation. Miller's nontraditional explanation: Aging baby boomers will demand more investment income, and opportunities to earn such income are dwindling. Yields on bonds and stocks are near record lows, and Miller sees no signs that inflation will boost those rates. He figures global competition and rising productivity will keep companies from raising prices even in an economic recovery. Many of Miller's cheapest holdings also have suffered from concerns about corporate accounting. He argues that people are so caught up in the scandals that they don't look at what the actual companies are worth in the long run. Such choices make this a potentially volatile fund in the short run. Moreover, the fund's level load siphons off a painful 0.95 percent of shareholder's assets every year. Morningstar estimates that expenses on a $10,000 initial investment will come to $1,987 over a decade. Then again, there's always the chance that Miller will break out with a huge winner or two -- as he did with technology stocks like Dell and AOL in the '90s. One current favorite is online bookseller Amazon.com, which he thinks will continue to grow more profitable as it gains market share. (Clint Willis is a freelance writer who covers mutual funds for Reuters. Any opinions in the column are solely those of Mr. Willis.)