A Buffett Disciple Hangs Tough

The manager of this small-cap value fund crushes his rivals.

How bad was the U.S. stock market over the past year? The best performers among diversified U.S. stock funds were those that specialize in small, undervalued companies -- and that group still lost an average of 29%. Royce Special Equity (symbol RYSEX), one of the category's stars, lost just half as much.

Charlie Dreifus, manager of Special Equity since its 1998 inception, says his stock-picking approach is an amalgam of the teachings of three legendary financial figures. In a nod to Benjamin Graham, considered the father of security analysis, Dreifus buys stocks only when they're dirt-cheap. Like Warren Buffett, he looks for companies with a sustainable competitive advantage. And following the tenets of Abraham Briloff, his accounting professor at City College of New York, Dreifus brings, as he says, a cynical eye to "trying to gauge the veracity of financial statements."

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Elizabeth Leary
Contributing Editor, Kiplinger's Personal Finance
Elizabeth Leary (née Ody) first joined Kiplinger in 2006 as a reporter, and has held various positions on staff and as a contributor in the years since. Her writing has also appeared in Barron's, BloombergBusinessweek, The Washington Post and other outlets.