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Over the last 70 years, value stocks clocked a 13.4% average annual return, vs. 10.2% for growth stocks, according to Ibbotson Associates.

Muhlenkamp

Where Are The Wise Money Managers?

Submitted on 01/06/2009

R.I.P., Bill Miller (Legg Mason Opportunity fund, -59% for 2008 through October 30). And Mason Hawkins (Longleaf Partners, -47%), Bill Nygren (Oakmark Select, -36%), Chris Davis and Ken Feinberg (Selected American Shares, -36%), Ron Muhlenkamp (-37%) and the guys and gals at Dodge & Cox Stock (-41%).

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Forbes Briefing Book: Ron Muhlenkamp

Submitted on 12/08/2008

The veteran go-anywhere mutual fund manager talks about finding value in the bear market and the real financial weapon of mass destruction: mark-to-market accounting.

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Some See a Buying Opportunity in Bank Shares

Submitted on 12/08/2008

Ron Muhlenkamp, a manager of value-stock portfolios, expects regulators to move to a system where valuations are less sensitive to day-to-day price fluctuations but provide better estimates of long-term worth.

That should increase lending and give a lift to share prices in banking, he said. When the rules change, “the lead weight comes off financials and all of a sudden they’ll resurrect pretty quickly,” he predicted.

Read more ...

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Muhlenkamp : 2007 2nd Quarter Letter

Submitted on 04/17/2007

A shareholder recently asked, “In light of last year’s performance, do you intend to take any action to modify the current investments in the Fund?” My response was (is) “Do you really want me to change a philosophy and discipline that’s worked well for 40 years because we could have done better in a transition year like 2006?” Folks, we’ve looked dumb before: the years 1994 (soft landing); 1998-99 (bubble); and 2002 (recession aftermath) are the most recent precursors to 2006. Each time we found that monitoring the economy and relying on the values of companies was the proper response.
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Muhlenkamp's Fund Loses Ground From Shakeout in Mortgage Market

Submitted on 03/08/2007

Ronald Muhlenkamp's $2.4 billion Muhlenkamp Fund, which lost value just once in the past 12 years, is getting hurt by the shakeout in the U.S. mortgage market. Muhlenkamp's mutual fund dropped 4.8 percent since the start of the year, the worst performance of 90 competing funds tracked by Bloomberg that buy shares of companies perceived as being undervalued. The manager counts Countrywide Financial Corp., the biggest U.S. mortgage lender, among his 10 largest holdings.

Rising mortgage rates and falling home prices caused the proportion of subprime loans that were either delinquent or in foreclosure to reach 10 percent in December, up from about 5 percent in May 2005, according to Friedman Billings Ramsey Group Inc. of Arlington, Virginia. Countrywide, which focuses on the safer, so-called prime part of the market, said March 1 that payments were late on almost 20 percent of the subprime loans it manages for clients.

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Ron Muhlenkamp Quarterly Letter

Submitted on 01/17/2007

2006 was a difficult year for Ron Muhlenkamp. Although his expectations on the economy were reasonably accurate (a soft landing), his expectations for the performance of some of our stocks were not. Specifically, he did not anticipate the degree and rapidity in which orders for new homes evaporated and the backlogs of homebuilders shrank. Muhlenkamp also did not anticipate the repeat of unusually warm winter weather, causing the price of natural gas to fall dramatically. Muhlenkamp has been encouraged by the action of the management of his companies. As their businesses slowed, they’ve used the resulting cash flows to buy in stock.

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Muhlenkamp Is Still a Great Fund

Submitted on 01/11/2007

Not everybody had a great 2006. Ron Muhlenkamp -- and shareholders in his Muhlenkamp fund (MUHLX) -- are nursing wounds. The fund returned a miserly 4% -- 12 percentage points less than Standard & Poor's 500-stock index. The performance was bad enough to put Muhlenkamp in the bottom 1% among all value funds.

Put some money in this loser. Like every first-rate manager, Muhlenkamp has a bad year once in a while. Just ask Bill Miller, whose streak of beating the S&P ended at 15 years in 2006 when his Legg Mason Value Trust returned just 6%.

When bad years happen to good managers, it's often time to add money to their funds. They may not bounce back immediately, but so long as their investment strategies remain sound and their funds haven't become bloated with assets, bounce back they will -- and you'll be glad you signed on for the ride.

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