These losses have wiped away Value Trust’s years of market-beating performance. The fund is now among the worst-performing in its class for the last one-, three-, five- and 10-year periods, according to Morningstar.
![[Loss leader]](http://s.wsj.net/public/resources/images/P1-AN935A_MILLE_NS_20081209222837.gif)
Here is the type of learning opportunity that will become increasingly available as chronicles of the demise of stock pickers and market timers continue to pour in through 2009.
Keep in mind that the losses above represent what the fund itself has given up, not the amount lost by individuals invested in the fund. That number will be significantly larger, once trading costs, high expense ratios, and taxes are factored in.
Fueled by winning bets on stocks other investors feared, Mr. Miller’s Legg Mason Value Trust outperformed the broad market every year from 1991 to 2005. It’s a streak no other fund manager has come close to matching.
Mr. Miller was in his element a year ago when troubles in the housing market began infecting financial markets. Working from his well-worn playbook, he snapped up American International Group Inc., Wachovia Corp., Bear Stearns Cos. and Freddie Mac. As the shares continued to fall, he argued that investors were overreacting. He kept buying.
What he saw as an opportunity turned into the biggest market crash since the Great Depression. Many Value Trust holdings were more or less wiped out. After 15 years of placing savvy bets against the herd, Mr. Miller had been trampled by it.
Filed under: Costs of mutual funds, Market meltdown learning opportunities, Wealth management in a post-meltdown world | Tagged: Add new tag, Bill Miller, Great Depression, Legg Mason, market crash, Stock Picker, Value Trust:
