Legg Mason Inc. named a successor to Bill Miller, its onetime star mutual-fund manager whose dismal performance in recent years led investors to flee his fund. Mr. Miller, 60 years old, gained fame for bold contrarian bets on stocks that led to his fund beating the market for 15 consecutive years, from 1991 to 2005.
When financial stocks tumbled in 2007 and 2008, Mr. Miller bought up shares of American International Group Inc., Wachovia Corp., Bear Stearns Cos. and Freddie Mac, all of which were nearly wiped out. The fund fell 55% in 2008, and its long-term performance record was shattered. The fund ranks at or near the bottom of its category over the past three-, five- and 10-year periods, according to Morningstar. Investors fled the fund, pushing its assets down from a peak of $21 billion to $4.2 billion currently.
It seems that nobody can outsmart the market forever. You can maybe beat the market for two or three years. Nevertheless, it is extremely improbable that you are going to beat the market with trading or active investing over 10, 20 or more years period. It is just not going to happen.
This article was partially taken over from the original article.
Source: The Wall Street Journal.