Managers Bill Nygren and David Herro are launching Oakmark Global Select. By Andrew Tanzer, Senior Associate Editor October 12, 2006 Imagine Albert Pujols, the Cardinals' redoubtable slugger, falling into a batting slump. It doesn't happen too often. A similar dry spell bedevils Bill Nygren, a highly regarded manager at the Oakmark funds. Nygren's long-term investment record is superb, but in each of the past three years, his Oakmark and Oakmark Select funds have trailed their benchmarks. The highly concentrated Select portfolio has been deflated by seemingly ill-timed investments in Dell, Intel and Pulte Homes.Now Nygren is launching a new fund, Oakmark Global Select, with David Herro, the ace manager of Oakmark International and Oakmark International Small Cap. Global Select will hold about 20 large-cap companies, half based in the U.S. and half situated overseas. The duo will run the fund along Oakmark principles of picking stocks from the bottom up by successfully identifying low-priced businesses that deploy capital efficiently. After buying, Oakmark patiently waits until the stock market recognizes the value of these holdings (extremely low portfolio turnover ratios are one of Oakmark's hallmarks). "What's important is that you stick to your philosophy," says Herro. So what stocks will Global Select purchase? Herro isn't saying, but he argues that large blue-chip businesses of the sort in the baskets of Oakmark, Oakmark Select and Oakmark International are undervalued in today's market. "We think this is the sweet spot of equity investing," he says. Two of Herro's favorite foreign picks are GlaxoSmithKline, a big pharma stock, and SK Telecom of South Korea; Nygren is enamored of YUM, the parent of the KFC, Pizza Hut and Taco Bell fast-food operations, and Time Warner. Herro expects the U.S. economy to slow in 2007, but he's optimistic about growth abroad. Is Oakmark Global Select (symbol OAKWX) worth buying? Oakmark does stick to its knitting and these are two of the best practitioners of long-term value investing in the game. But as Herro says, "A concentration strategy either works well long term, or you compound mistakes." Success of Global Select awaits Nygren's breaking out of that batting slump.