Monday, December 11, 2006

Am I Missing Something?

I've been a big advocate of mutual funds and diversification. (That's possibly why I love my ETF's). I read an interesting article on Bill Miller (the guy who manages Legg Mason's Value Trust Mutual Fund).

After 15 years, this is the first year where his fund will not beat the SP500. Now, with dividends, the SP500 has been returning 15%. His fund did 4%.

That is a beat down.

How can you only manage 4%? I just don't understand it. He was investing in Ebay and Yahoo. Now, (despite the fact that I am a professional investor), even the average person can look at those graphs and see something wrong.

Even the casual investor reads the news. What is hot right now? There are so many to name, but I could start by naming a few: outsourcing IT in India, Emerging markets in Brazil.

I mean, just open up this graph for Infosys (ticker: INFY). That has been a gold mine. Hell, even a BEVERAGE company is beating the markets hands down (Hansen, HANS).

4%? Wow. Maybe you should be looking at a real day job.


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