An old joke that Peter Lynch often brought up when given the opportunity to give a speech went as follows: Lynch would describe a press release that has legendary Magellan mutual fund trounced the S&P 500 by five, even ten percentage points in some years, and later that day, he’d get a call from a client saying, “Yeah, that’s nice, but why’d you buy that dog Bethlehem Steel? You lost 80% on that one!”
The example was used to show how irrational some clients can be; even when your returns are in the top 1% of all investment managers out there, some people can still find something to complain about (as an aside, that is why the truly successful mutual fund managers quickly exit the public domain once they have made “enough”, and then they tend to go super private by either managing their own money or investing privately on … Read the rest of this article!