|Now, by coincidence, there is yet another Omaha investment guru of special note. He is mutual fund manager Wallace Weitz. Even though value investing has taking a definite back seat, in recent years, to the momentum growth stock style of equities speculation, Weitz Partners Value Fund has beaten the Standard and Poors 500 Index performance over the past ten years, per "Forbes," 2/7/00, page 158, with a 19% compounded annual average total return, which also happens to be a better record than that of the majority of his mutual fund peers, by far. In the last five or six years we have seen him in a couple interviews and have read a few articles on him. His philosophy of investing seems similar to our own, though, with over $1,000,000,000 under his management, he is clearly much more successful at what he does! Not for the first time, lately he has been lightening up the percentage of his assets in equities. Cash now accounts for 25% of his total in the fund. He says he is skeptical of all the euphoria in the market.
Like that other Omaha investment guru, he works in somewhat Spartan office conditions, with a small staff. At age 50 he has a certain wisdom, confidence, and maturity that allows him to take unconventional positions, sometimes making large, well-focused investments in not so obvious places. Currently, for instance, one-third of his total assets is in financial stocks, beaten down lately on the assumption they cannot do well in a rising interest rate environment. Weitz thinks this is wrong.
He also tends to trade very little, another approach we can appreciate. In a recent study reported in "Money," 3/00, p. 75-78, the results of the highest vs. the lowest trading investors were compared, for the period 2/91-1/97: the most active traders’ average performance was 11.4% per year, while the least active traders racked up an average annual total return of 18.5%.
His is a no-load fund, but it does have a higher than index funds expense ratio, at 1.25%.
The big catch with owning shares under his management, however, is the $100,000 minimum initial investment. Purchases through one of the large fund supermarkets, like Schwab, though, where an account can be opened, we believe, for as little as $5000 generally or $2000 for an IRA, are possible, for as low as $2000 in the Weitz Fd (symbol: WPVLX). At Schwab, where we recently placed a not insignificant order, there was no commission.