What the World's Greatest Investors Are Saying Now: An Overview

Editor s note: Even as stocks come crawling back from the abyss, big name money managers are still going to have a hard time regaining investors trust even if they deserve it. In this special report, SmartMoney spoke with four of the world s greatest investors to see how they managed to minimize investors losses during the worst of the downturn and how they re making money now.

With stocks crawling Back from last winter s abyss, and a reforming White House trying to restore some order to the Wild West of the markets with new regulations, we re starting to regain confidence in our investments. But when it comes to our feelings about big-name investors well, it s going to take a lot of wooing to teach us how to love again. After a crash in which almost every mutual fund manager suffered big losses, investors are finding it hard to believe that any wise man or woman really deserves our trust.

There may be an antidote to this kind of skepticism: experience. Managers who have witnessed good markets and bad, over careers spanning decades, are more proficient than their peers at adapting to trouble. Indeed, during the bungee-cord drop and rebound of the past 12 months, U.S. stock funds that have had the same manager for 10 years or longer lost slightly less money than their peers, according to data from Morningstar. And they ve also been more likely to show positive returns so far in 2009. That s why we ve focused this year s installment of our World s Greatest Investors series on a truly battle-tested group of thinkers.

These four managers invest in such diverse fields as small-cap tech, corporate bonds and the foreign mergers-and-acquisitions market, but what s more important is what they have in common: They minimized investors pain during the downturn, and they re rebounding better than average in the current recovery.

If some of these names sound familiar, they ve earned the exposure. Bill Gross has become the country s foremost bond investor in his 22 years at Pimco, Joel Tillinghast has logged 20 years managing one of the top funds in the massive Fidelity family, and Bob Rodriguez has averaged double-digit returns for two decades at FPA Capital. Our one newbie, Anne Gudefin, may be relatively young at 43, but she s shined for almost a decade as an analyst and manager at the innovative Mutual Series fund family and in last year s crisis, she made calls worthy of a grizzled veteran.

Of course, even the grizzled can get eaten by a bear: Warren Buffett, also profiled in the August issue of SmartMoney magazine, is having the worst year of his career. But overall, our group proves that a long-term view of the market and the experience to back it up are the keys to success.

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