Was Michael Price a great value investor?

[stahleyp]

Hopefully, someone here can shine light on this. I've heard how great a manager Price was when he managed the Mutual Shares. According to the information I found, he started as a full partner in 1982. If we run the numbers from 10/18/82 to 10/18/98 (the year he retired), he actually underperformed the S&P 500.

 

I'm making the assumptions that he made the actual decisions from 1982 on. I certainly could be incorrect about this, though!

 

Now, to be fair, the last little dip was after he annouce that he would leave (or maybe he was gone at the time), but even if we start back a little before that, he barely beat the S&P. After taxes, he would've underperformed.

 

According to Morningstar, $10,000 invested 10/18/82 would've grown to $123,923.65 on 10/18/98.

 

Through the same time the index investment would've grown to $146,741.63.

 

If we back the data up until 10/18/97, MUTHX would be worth $137,527.23  vs $129,128.01 for the index.

 

Shouldn't a renowned value investor be able to beat the index by more than this over a 15 year period?

[ExpectedValue]

I don't know much about Michael Price but... Seth Klarman is a great value investor who underperformed during the 90's. I don't think it matters much because at least Klarman runs his fund more like an absolute return portfolio. He's usually able to protect his clients well during periods where the market has a sharp downturn -- which is why I think clients have given him $20B to run right now.

[stahleyp]

Yes, I know much more about Klarman. I read through some of his letters. I think he underperformed the s&p quite severly for a number of years. But, over the life, he's beat it by quite a large margin.

 

With Price, though, I'm trying to go over the entire tenture since he became a partner...and it doesn't look very good, from what I can tell.

 

Maybe Price is Klarman's Graham?