A rare anniversary - The Boston Globe

Good column in this morning's Globe about Will Danoff, one of the best mutual fund portfolio managers of our generation.

You don't hear too much about Danoff, and you almost get the impression that he likes it that way. Still, the performance record that he has compiled in Fidelity's Contrafund has been truly impressive, especially when you consider that the fund is now $61 billion in size.

The best part of the column, in my opinion, in the article speaks to why he has been so successful, namely patience and humbleness:

Danoff believes the lessons he learned over 20 years are simple but powerful. Chief among them: acknowledge you will make mistakes, and learn from them.

He sounds like Peter Lynch when he talks about a strategy of searching for young companies with big potential and sticking with them for the long haul. “They don’t go up in a straight line,’’ Danoff says. “Just staying with them is one of the big lessons I’ve learned.’’

Sounds simple, but it's harder in practice, especially when you're under constant performance pressure. Fidelity pays well for top performers, but can be ruthless if results start lagging the competition.

So here's how Danoff's combination of patience, humbleness, and just plain hard work has paid off:

Contra has earned an average of 12.2 percent annually over a 20-year period that ended Aug. 31, better than the S&P 500’s average gain of 8.3 percent. Stretch that over two decades, and Danoff’s fund returned a total of 903 percent, compared to the index’s 393 percent.

Numbers like those aren’t unprecedented, but they’re rare as hen’s teeth. I asked the fund research firm Morningstar Inc. for a list of top-performing mutual funds over the past 20 years and then isolated those managed by a single person throughout. Only five funds, including Joel Tillinghast’s Fidelity Low-Priced Stock fund, performed better than Contra.

A rare anniversary - The Boston Globe