Bill Nygren: A Space Odyssey

Bill Nygren, the value investor hailed by Morningstar as the Domestic Fund manager of 2001, is lost in deep space.

For the past few years, he has been loading up on WaMu stock telling anyone who will listen what a bargain it is. Has he been paying attention to ANYTHING? Even my own tax preparer told me last year: "I don't know much about stocks, but I do know the loan process out here is a joke and I would never invest a dime in WaMu." The writing was on the wall long before FBR and Citi analysts questioned their staying power (link).

We are talking about the 2001 manager of the year here. The cream of the crop. What kind of analysis is he doing? Is he really doing due diligence for his shareholders? Last I checked, 13% of Select's holdings were in WaMu and the fund is down about 7% this year! His fourth largest holding, HRB, is an equal mess!

This is one of the many examples of when the so-called "smart" money is not so smart. Sure, they have CFAs and awards, but do they have common sense? Can they see the forest from the trees? Sure, it is only one year (unless you want to bring in his under-performance in 2004, 2005, and 2006), but, then again, 2001 was only one year.