The world according to Eveillard

Why disciplined value investing is so difficult. Ask yourself a simple question - "If Warren Buffett is the second-richest man in the world, why aren't there more professional value investors ?" Jean-Marie Eveillard of First Eagle Funds says "If you are a value investor, every now and then you lad. It can be very painful. To be a value investor, you have to be willing suffer pain"

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Jean-Marie Eveillard: A value maestro's encore

The 67-year-old Eveillard had been one of Wall Street's best value investors, leading Bleichroeder's First Eagle Global fund to a 15.8% average annual return - compared with 13.7% for the S&P 500 - over his 26 years at the helm, according to Morningstar.

In addition to Global, with $22.1 billion in assets, Eveillard is back running three other First Eagle funds - $1.1 billion Gold, $11.9 billion Overseas, and $677 million U.S. Value. (Only U.S. Value is open to new investors.) He agreed to stay on full-time for a year, after which associate portfolio manager Charles de Lardemelle will take over.

Eveillard says he came out of retirement to protect funds that "were a little bit my babies."

He can be very protective. Global lost money only twice during his tenure: a trifling 1.3% in 1990 and 0.26% in 1998. And while Eveillard underperformed the market during the late 1990s, fans see that as less a failure than a show of character.

"In the late 1990s - when I think his fund shrank to half its former size because he was not buying the crazy tech stocks that were doing so well - he stuck with his strategy," says Bruce Greenwald, a finance professor at Columbia Business School, where Eveillard has lectured. "That really made his reputation later on."

Indeed, Global was a post-crash standout, returning 10.5% in both 2001 and 2002, 38% in 2003, and 18.7% in 2004.

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