Secrets of the Masters 21sense only in the light of complexity. When viewed this way, they
are showing that they can dribble with either hand, or—to use a
tennis metaphor—that they can hit a backhand and a forehand
equally well.
Some investors have asked me, “How well do these traits hold
up in the decade of the 1990s?” After all, Peter Lynch hasn’t been
actively managing money this past decade. Furthermore, a Forbes
article, entitled “Quit While You’re Ahead” (February 7, 2000),
states that Lynch’s approach—buy what you are familiar with—
wouldn’t have worked in the 90s. The article uses Lynch’s picks
from Worth magazine during the 90s and concludes that his selec-
tions would be valued as “27% less than identical sums put into
the S&P 500.”
Ouch. Say it ain’t so!
Buffett is another case in point. He often mocks himself for not
understanding technology and hence not investing in it. Modesty
aside, his portfolio picks have suffered as a result of his techno-
phobia. Blue-chip growers like Coke just can’t compete with the
likes of Microsoft and AOL.
So, are these eight traits outdated? Or are there contemporary
all-stars who demonstrate them?
I believe the traits are alive and well. In fact, I like them for this
very reason. Regardless of cycles or fads, yuppies or Gen-Xers, the
deep truths of life remain the same. As you will see in Chapter 4,
the eight traits are based on deep truths about our psyches. But to
make my point, consider a modern superstar, Mike Lu.
Mike Lu manages the Janus Global Technology Fund. This fund
was up—brace yourself (especially if you didn’t own it)— 212
percent in 1999. In that same period, average technology funds
climbed 135 percent. The S&P 500 increased 21 percent. Lu is
considered a superstar by his coworkers.
Does he practice the eight habits? It seems so. His radar screen
is constantly searching for ideas, both in and out of the investment
field. He studies politics, architecture, and automotive design. He03 ware 21 1/19/01, 1:01 PM