With all the fall out from the sub-prime mortgage mess, many portfolio managers are scrambling. Here is what Morningstar had to say in Morningstar Analysis 8-27-07:

In his letter, dated Aug. 16, Nygren wrote: “The Oakmark Select Fund’s performance since the end of the second quarter has been dreadful. Not only has the market declined significantly, but our Fund has fared meaningfully worse.”
Part of this underperformance, he states, is due to the fund’s longstanding position in Washington Mutual WM (nearly 14% of assets), which has suffered significant declines this year due to the fallout from subprime mortgage trouble. Nevertheless, Nygren argues that “Washington Mutual has taken on less risk in their loan portfolio than their peers have, as demonstrated by the strong credit ratings of their borrowers (FICO scores) and their lower loan-to-value ratios. Further, as a bank, Washington Mutual has much longer term funding than do pure mortgage originators. (and in the end) this difficult period should end up enhancing Washington Mutual’s long-term earnings potential.”
Nygren wrote that even if his analysis of this company’s holdings is wrong, he and his team remain committed to their long-term, value-oriented investment style. He also said in an interview that he bought more shares of the fund during its travails.

In contrast, some fund shops recently have shown terrible shareholder communication.
The point of this? Honesty is great. But the key is for managers to stick to their proven, long-term investment styles, resisting a short-term reaction that could end up losing over time. You may want to check your managers for “style drift” during this market volatility.