Weitz said the past few months have been "embarrassing" for him and other managers. "And I've lost money too." Morningstar, a firm that rates funds, has praised Weitz over the years because of outstanding performance and his investments of his own money along with clients' - evidence, according to Morningstar, that he believes firmly in what he is doing.
Among Whitman's investments are GMAC bonds and bonds in troubled insurance companies MBIA and Ambac, both insured mortgage-related bonds that have plunged in value amid the worst decline in home values since the Depression.
During the last bear market, it was growth stocks - and particularly technology shares - that plunged 70 percent or more because investors had speculated on them amid a mania that pushed the stocks to unreasonable prices. This time, the mania took place in the financial area - with mortgages and mortgage bonds held by financial companies.
Recently, the average fund that invests in large-growth companies had dropped roughly 12 percent for the year, but value funds investing in large companies had dropped about 17 percent, according to Lipper Inc.
Despite the size of the losses some of the foremost fund managers have incurred this year, Kinnel said he would not dump a fund based on eight months of bad performance. Typically, he said, he would examine three years or more.
It's a position supported by consultants who help pension funds select managers.
"The last 18 months have been a brutal place for fund managers, so we are hanging in there with these managers," said Jeff Schutes, head of the Americas for Mercer, a pension consulting business. "There are things taking place that are significantly different than any other market we've ever been in. What's happening with financial companies is incredible. What's happening with energy is incredible," he said.
Schutes said a fund manager's performance this year could appear good or poor simply on the basis of whether he or she bought a lot of or few stocks in two sectors: financial companies and energy.
