How is the average guy-on-the-street investor during? Well, he's been handling the recent rollercoaster markets with greater aplomb than most Wall Street professionals. At least, that is the opinion of Ron Muhlenkamp, head of Muhlenkamp & Company and manager of the Muhlenkamp Fund (MUHLX).

Muhlenkamp was visiting New York City yesterday to speak at the SunStar/Quasar press briefing. One of the primary messages that Kathryn Morris and Dan Sondhelm -- president and vice president respectively of SunStar -- have been trying to instill in their clients is the idea that it is important for portfolio managers and mutual fund heads stay in the public eye even during market downturns. "It is important that managers put what is happening in their fund in context. It is important that managers be visible to calm investors and put matters into a long-term perspective," Sondhelm has told the MutualFundWire.com in the past.

Muhlenkamp -- no wallflower he -- appears to be living that philosophy with gusto. Humorous, pointed, and often irreverent, Muhlenkamp spoke to the assembled group of financial journalists and portfolio managers on investor psychology. "The pros panicked," the executive contended. "The average investor kept his cool."

"This recession is cyclical and self-correcting. A part of the problem is the hangover from the stock hype bubble," Muhlenkamp continued. "But this too will pass. We try to look at three time periods: the immediate, the intermediary, and the long-term. Now, in the short-term stock prices are determined by psychology, by fads. But in the long-term, they are determined by fundamentals. And that is what we try and focus on."

"For our clients, if they experienced downturns before -- like the Asian flu or the '91 recession -- then they stay the course. For our investors who haven't seen this before, they get very very nervous," he told the MutualFundWire.com later.

"In many respects, the financial page of the newspaper is like the sports page. It is a source of conversation, but it doesn't directly affect their lives," the manager opined.

"We look to avoid fads. And sometimes that costs us. We lost clients in 1999 because we wouldn't go after tech stocks. If you think about stocks in terms of cars, we don't go after Cadillacs. We look for Pontiacs and Buicks on sale. Now, occasionally, a Cadillac will go on sale, but not that often. Our goal is to make money over the long-term, and we are on track to doing just that," Muhlenkamp concluded. 

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