Steve Romick on WealthTrack
Something we didn’t know was that the FPA Crescent Fund lost 90% of its assets in 1998 and 1999 after under-performing by 56% during the tech bubble mania. What happened after that shouldn’t be a surprise: the remaining investors benefitted as they went on to beat the market handily in the following years.
Romick also defines “good investors,” saying [paraphrasing] they understand what they are good at and stick to it. If they can’t find opportunities that fit their criteria, they just wait.
We happen to agree with Steve’s assessment as one aspect of what makes a good investor and FPA has certainly walked the walk having stood their ground in 98-99 and again before the financial crisis when they lost a significant percentage of their assets under management for holding high cash balances.