Bill Miller: The Stock Picker's Defeat

From 1991 to 2005, Bill Miller (superstar mutual fund manager for Legg Mason's Value Trust) beat the S&P every year - a record no other manager has ever come close to matching. Then, this last year the bottom fell out and his fund lost 58% (about 20% more than the typical fund.

The Wall Street Journal has a great interview of Miller, and here's the best line:

This meltdown has provided a lesson for Mr. Miller and other "value" investors: A stock may look tantalizingly cheap, but sometimes that's for good reason.

It's a very good piece for discussing in class, since it touches on a lot of issues related to market efficiency. Read the whole thing here.