There was a time when famous investors inspired the little people for their daring moves and big gains. And now? If there's a lesson emerging from some of the moves in 2011, it's that the famous investors can screw up as royally as anyone.
John Paulson, the hedge fund manager who runs Paulson & Co. recently took a bath on his big investment in Sino-Forest Corp. , the embattled Chinese forestry company - and he continues to struggle with sizable investments in Bank of America Corp., Citigroup Inc. and gold.
Now, according to Bloomberg News, legendary mutual fund manager Bill Miller has finally called it quits on his much-publicized bet on Eastman Kodak Co. A decade ago, Mr. Miller mused that the stock was worth about $100 (U.S.) a share, at a time when it traded at about $56, pointing to the company's free cash flow and growth in conventional camera sales.
Mr. Miller, made famous for beating the returns on the S&P 500 for 15 straight years until 2005, ditched his Kodak holdings from his flagship Legg Mason Capital Management Value Trust fund late last year and earlier this year at an average price of just $3.89. The shares traded hands in late morning trading on Tuesday at $3.40 - down about 90 per cent over the past 10 years.
Of course, everyone can make a losing bet. But, as with Paulson, this losing bet seems to highlight some broader performance problems. As Bloomberg pointed out, the Value Trust fund has fallen about 2.3 per cent this year, underperforming the S&P 500 and about 94 per cent of rival funds that pursue similar strategies.