Live by the Sword…Die by the Sword

Straight talk from mutual fund managers is a rare commodity in the investment arena.  Excuses, spin doctoring and excessive BS are their stock in trade.  Its how they hold onto assets when they really don’t deserve to.

Thats why we want to give a shout out to Ric Dillon Jr. and the crew at Diamond Hill Investments.  Diamond Hill is a small, employee-owned investment organization in Columbus, Ohio, an area of the country better known for football fanatics than investment geniuses. Diamond Hill Investments (Morningstar)

Perhaps it is easier to see the forest through the trees in Columbus, or maybe its something in the water.  In any case, Ric and his team of dorky looking CFA-types have put up numbers that positively sparkle.

Until this year.

A hefty overweight in the energy sector has left their small and mid-cap strategy offerings near the bottom of their peer group after a few years of serious outperformance. As we saw in the aftermath of the tech bubble, a large sector bet can quickly turn a hero into a goat. But they are sticking with their energy thesis and explain their rationale in their latest quarterly review, instead of blowing smoke up their clients rear-ends which is the modus operandi in these situations. 

We applaud this approach. It is forthright and and honest.  Its the polar opposite of snake oil doled out constantly by the big mutual fund shops.  And it probably does more to buy them time and earn their clients trust than any other course of action. Of course, they better get it right.

Maybe the Putnams of the world can learn something from these dorks.

The first of many in our new feature: Shout Out

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