There is a great and sobering “where are they now” article in Kiplinger this month looking at the technology fund manager class of 1999. You remember them, they were the ex-lawyers, biologists, and other newbie fund managers who turned in triple-digit performance at the peak of the boom. On average if you had $10,000 in any of those funds at the end of 1999 it would be worth around $4,000 today, versus $9,339 for the S&P 500.
If the Kiplinger story stopped there it would be worth reading, but it goes on to take apart the transformation of one fund manager in particular: quasi-blogger Robert Loest, formerly of IPS Advisory, and now of Integrity Funds. At its peak in 1999 Loest’s IPS was managing more than $600-million in assets, but today, in admittedly merged and strategy-changed form, he’s running a mere $53-million. What’s more, Loest has gone from an out-there guy who bought tech stocks without worrying overly about price, to a deep value guy who buys nothing that isn’t selling for less than break-up value, and that doesn’t produce “prodigious amounts of free cash flow”.
While it would be easy to draw all sorts of cynical conclusions, let’s just say instead, How times change.