Tuesday, June 9, 2009

Re: Morningstar Conference

Leading up to the Morninstar Investor Conference I had this to say about it:

As fund managers trying to cope with redemptions, there is likely to be a lot of people talking their book and a bit less candor than usual can probably be expected from each manager too. That said, the other managers are likely to be less polite about their differences--in both style and positions--and that could lead to some very interesting, educational conversations. If I had to bet, I'd say the conference is undervalued.
Haven't seen much more on the conference than the bit that follows (from the WSJ), but if this was all that was said, reading the annual reports for free would have been far better.

The participants of a panel of value-focused managers, including Marty Whitman of Third Avenue Funds, were defiant about their losses last year. Mr. Whitman's Third Avenue Value Fund was down 46% in 2008.

"It was a market fleeing from the asset class, and not correcting or rebalancing at all," said Bill Nygren, manager of Oakmark Fund. "[Value managers] don't add value in that market."

More than one manager called last year's crisis "irrational," caused by forced selling, particularly among hedge funds and quantitative managers, and overstated fears. The value managers said they haven't changed how they approach their stock-picking strategies, despite last year's losses.

One question frequently asked among financial advisers and investment professionals at the Morningstar conference is whether the crisis will push funds to make wholesale changes. Yet many managers see business as usual once the recovery gets under way, with estimates ranging from either later this year or in early 2010, but some did see a possibility of different times ahead.
Note: the posting forecast for the next couple months will be dominated by sporadic showers of wit that you can use to help you invest better (as opposed to the usual 5-day posting schedule).

1 comment:

  1. When will these fund managers realize that they were woefully wrong? Defending 46% loss for the year on irrational hedge fund selling is baloney. Its as if someone stole the "SELL" button from their keyboards - pathetic!