Have you wondered why the mutual funds you owned in your 401k account continued to hold on to Lehman Brothers stock all the way from $65 on Jan 1, 2008 to $0 on September 15, 2008, even though there were plenty of time to get out at $50, $40, $30, or even $20, etc prior to it filed bankruptcy?
Morningstar recently published a great article on fund managers’ ownership of their own funds (http://news.morningstar.com/articlenet/article.aspx?id=372678), which may explain why most fund managers do not feel the pains fund shareholders are feeling:
“Fully 4,347 funds out of about 6,557 have at least one manager who isn’t investing in the fund. And of the 1,126 funds where there is just one manager, there is no manager ownership. On the plus side, 564 funds have at least one manager with more than $1 million at stake in the fund they run.”
4,347 funds out of about 6,557 is a shocking 66.29%! On the other hand, Warren E. Buffett, the most successful investor and money manager in the world, has invested almost all his money along with share holders of Berkshire Hathaway Inc.