Long-Haul Investing

How do you find these really good fund managers? There's no sure-fire mechanism, but I haven't yet found anything better yet than looking at long-term performance.

And I mean really long-term. I want to see 10 years' worth of numbers, or more. If someone's up over one, two or three years, it doesn't mean much. They may just be lucky, or surfing a wave.

Sure, someone who's beaten the market over 10 years may just have been lucky too, but it's a lot less likely. There's an excellent chance they really know what they're doing. Successful investing is an art as much as a science.

Among the domestic fund managers with this kind of record are Bill Miller at (LMVTX Quote)Legg Mason Value Trust (LMVTX) and (LMOPX Quote)Legg Mason Opportunity Trust (LMOPX), Bill Nygren at (OAKLX Quote)Oakmark Select (OAKLX), Ron Muhlenkamp at (MUHLX Quote)Muhlenkamp (MUHLX), David Williams at (UMBIX Quote)Excelsior Value and Restructuring (UMBIX), Manu Daftary at (QUAGX Quote)Quaker Strategic Growth (QUAGX), Richie Freeman at (SHRAX Quote)Legg Mason Partners Aggressive Growth (SHRAX), and Saul Pannell at (ITHAX Quote)Hartford Capital Appreciation (ITHAX).

Jeff Bruce at (BRUFX Quote)Bruce Fund (BRUFX) has a truly stunning record lasting more than 20 years. Over the past 10 he has turned $10,000 into $63,000. You can only invest by mail -- and that keeps most people out.

Those with excellent long-term records also include Will Danoff at (FCNTX Quote)Fidelity Contrafund (FCNTX), but he now manages more than $50 billion, and it's tough to make an elephant dance. Marty Whitman at (TAVFX Quote)Third Avenue Value (TAVFX) also has a terrific long-term record, but he is now moving toward retirement. The same goes for the all-time champ, Warren Buffett at Berkshire Hathaway (BRKA Quote).