[buffett]

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The key characteristics that these investors have are great judgment and patience. A secondary characteristic is that most eschew running mutual funds, which are structured to sap performance. Those who do run mutual funds usually do so intelligently, i.e. they close before they get too big, which eliminates some of the handicaps.

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As usual, I think DC's posts in this thread are great stuff. Here's an anecdote Bill Miller tells about his early days in the mutual fund world (I lifted the text from the 05q3 report for the Tilson Mutual Funds):

When I was starting out in the business, I was pitching R.J. Reynolds [the Tilson Funds have no position in this security] as a buy to an account in Boston. RJR was a conglomerate then, 1983, trading at 4x earnings. My pitch was that it was really cheap and was going to go up a lot over the next couple of years. When I finished, the chief investment officer said, “That’s a really compelling case, but we can’t own that. You didn’t tell me why it’s going to outperform the market in the next nine months.” I said I didn’t know if it was going to do that or not, but that there was a very high probability that it would do well over the next three to five years. He said, “How long have you been in this business? There’s a lot of performance pressure in this business, and performing three to five years down the road doesn’t cut it. You won’t be in business then. Clients expect you perform right now.” So I said “Let me ask you, how’s your performance?” He said “It’s terrible, that’s why we’re under a lot of performance pressure.”