I posted here part 1 about this battle between Martin Whitman (TAVFX) and Bill Ackman.

Today ABK.MBI were downgraded by S&P,in april by Fitch and this month they will probably be downgraded by Moody's.

If Moody's will downgrade ABK,MBI there are voices they will be out of business because they will not be able to write their municipal bond insurance.

If ABK and MBI will go to zero the loss on Martin Whitman's side will be around $700 million. Now you probably say and what ?  If you add other Martin Whitman's picks ACA (-98%),HDVTF.PK (-95%),RDN (-90%),HDL (-99%).

You get loss close to 1B if you manage 10B fund you get 10% erazed.

Now let's take Bill Ackman's ultra highly concentrated bets BGP (-70%),SHLD (-50%).

The other person I admire is Arnold Schneider (SCMVX). I stopped conting how many of his picks went bakrupt
 
I can't help it,but I have to wonder how can I be able to have high rate of good picks when 3 of the best fund managers in the world are picking stocks that go down a lot and what is even worse bankrupt.

I remember how David Dreman got angry at these new value machine funds. Machine just picks 100 of low ratios stocks and then some go up, some go down and at the end they are sometimes beating the market.

I just wonder how comes that W.B.'s success ratio is so high and what is even worse he is able to buy whole companies with the same success strange isn't it ?