2008's terrible performance for stocks took its toll even among the best investors in the world. But those who ran for the hills following those bad results now have reason to regret their decisions, as many of those experienced money managers have seen market-beating, double-digit returns so far this year.

For a long time during the bear market, many were questioning whether the exceptional track records exemplified by renowned value investors like Bill Miller were merely the result of luck rather than skill. Years of subpar performance made some wonder if they had lost their touch.

Clawing back
But as 2009 has shown, many well-known value managers have started generating market-beating returns once again. Here's a sample:

Fund

Manager

2008 Return

2009 YTD Return

Legg Mason Value Trust (LMNVX)

Bill Miller

(54.6%)

24.4%

Oakmark Select (OAKLX)

Bill Nygren

(36.2%)

27.1%

Muhlenkamp Fund (MUHLX)

Ron Muhlenkamp

(40.4%)

15.5%

Third Avenue Value (TAVFX)

Marty Whitman

(45.6%)

25.5%

Source: Morningstar.

Of course, the gains these fund managers have put up still leave their funds' shareholders in a deep hole after their losses in previous years. Most of these funds posted losses in 2007 as well as 2008. But considering that the recent four-month rally has only brought the S&P 500 to single-digit percentage gains for the year, the much bigger returns that these funds have generated during 2009 have to come as a welcome consolation prize for battered investors.

What went right
Clearly, all of these managers made big mistakes in the past few years. Some of their errors came from underestimating the risks involved in some beaten-down stocks, especially financials. Although it was tempting to believe that traditional value stocks would rebound the same way that they had in the past, the numerous failures in the financial and auto industries, as well as difficulties throughout the economy, have put pressure on investing strategies that had produced much better returns in the past.

Now, though, it appears that these managers can argue that they were merely early on some of their calls. Take a closer look at some of the reasons why these value funds have bounced back so strongly this year.

  • Bill Miller has seen his shares of Goldman Sachs (NYSE:GS) almost double so far in 2009, with Amazon.com (NASDAQ:AMZN) and Sears Holdings (NASDAQ:SHLD) also contributing strongly to its performance.
  • Bill Nygren's concentration on media stocks like Discovery Communications (NASDAQ:DISCA) have reaped generous returns.
  • Ron Muhlenkamp owns a somewhat more eclectic selection of stocks, which has produced winners ranging from offshore-driller Transocean (NYSE:RIG) to medical technology manufacturer Kinetic Concepts (NYSE:KCI).
  • Marty Whitman holds a significant amount of assets in foreign stocks. POSCO (NYSE:PKX), for instance, is up 30% this year and has more than doubled from its March lows.

Given what had happened to these stocks' share prices, you can see that many of them would have looked really scary during 2008's panic or the following lows just a few months ago. Yet these managers stuck to their resolve, having confidence in their stock-picking abilities and knowing that in the long run, stocks with strong value propositions along with margins of safety would recover strongly and come back into favor.

Sticking with experience
Even when you have long-time successful managers at the helm of your funds, it's never easy to stick with them when they're having slumps. But what the recovery has reminded us is that great long-term performance comes despite occasional losses. Even though a manager may not make money all the time, great investors have the knowledge and skills to bounce back from even the worst setbacks and sustain that superior track record for years to come.

For more on reaping rewards with value investing, read about:

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Fool contributor Dan Caplinger always looks for great values. He doesn't own shares of the companies mentioned in this article. Muhlenkamp and Third Avenue Value are Motley Fool Champion Funds selections. Amazon.com is a  Stock Advisor pick. Sears Holdings is an Inside Value recommendation. Posco is an Income Investor selection. The Fool owns shares of Kinetic Concepts. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy always bounces back strong.