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SmartMoney Magazine
Posted: Fri, Aug 11 2006, 11:46 am EDT
Post subject: The World's Greatest Investors
SmartMoney Magazine's Cover Story
The World's Greatest Investors
By Dyan Machan Published: July 12, 2006
ONE OF THE GREAT THINGS about the American capitalist system is all the noise. For every buyer there's a seller and many in between expressing opinions. So it's unusual to hear some of the canniest investors in the world all singing a version of the same tune. There isn't a man on our roster who isn't lusty over big-name stocks, which have been left behind in recent years while smaller stocks have surged ahead.
Christopher Davis, of Davis Advisors, is thrilled to find many of his favorite companies, like Procter & Gamble and Wal-Mart, selling at valuations he hasn't seen in years. "You won't get a 10- or 20-bagger, but decent growth and more protection," he concludes. John Neff, who built a stunning record during his 31 years at the helm of Vanguard's Windsor fund, sees stocks as a superior alternative to bonds and real estate. "Equities are selling at 14 times next year's earnings, not a giveaway," he says, "but long bonds aren't very interesting, nor is commercial property." David Dreman, of Dreman Value Management, wouldn't touch a high-multiple stock with a barge pole. He is slyly pleased that lofty names have come down to earth.
Even Omaha's favorite son, Warren Buffett, is singing. Or should we say swinging? Fond of baseball analogies, Buffett is finally taking a few cuts at some fat pitches after years of watching balls go by. Not to be metaphorically outdone, Bill Miller, of Legg Mason, finds a current lesson for investors in Henry James's The Beast in the Jungle. The protagonist fails to marry his true love because he is so sure that tragedy will befall him and therefore her. Nothing horrible happens to him, however, and he misses out on love. Thus, fearful investors pessimistic about deficits and inflation may lose out — not in love, but in prosperity. Patience, all five agree, is key.
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Warren Buffett
Bill Miller
Christopher Davis
David Dreman
John Neff
...
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