NEW YORK (CNNfn) - Forgive fund manager Wally Weitz for sounding, well, a little embarrassed.
For a man who hates publicity, who prefers plaid shirts to suits, who lives in the Midwest away from the intensity of Wall Street, the past several years have been a challenge.
While value funds were among the worst performers of 1999, Weitz's funds have been clobbering their peers and the S&P 500 over one, three, five and 10 years. And some people insist on comparing him to another bargain-conscious money manager from Omaha -- Warren Buffett.
"We try to stay out of sight," Weitz said with typical understatement. "We don't like to attract attention."
Weitz, 50, is founder of Wallace R. Weitz & Co., which manages assets of more than $4 billion.
Weitz Value Fund, with $2.43 billion in assets, earned 21 percent in 1999, 28.9 percent in 1998, and 38.9 percent in 1997, a time when most value funds were slapped with losses and redemptions.
Weitz Partners Value Fund, with $1.09 billion in assets, earned 22 percent in 1999, 29.1 percent in 1998 and 40.6 percent in 1997. (Note: both funds have steep initial investments to get in: Weitz Value has a $25,000 minimum while Weitz Partners Value's minimum is $100,000).
He is among the die-hard value investors such as Buffett who follow the teachings of Benjamin Graham, who many consider the father of value investing. Weitz has admired Buffett for all of his professional life, though he finds the constant comparisons awkward.
Over the years he has been called a Buffett clone and a "poor man's Warren Buffett." But in his mind, he's like a baseball player who lives in Babe Ruth's hometown.
"I've had some modest contact with him over the years," Weitz said of Buffett. "I like him. I think he's the greatest. I really try very hard to make sure I don't imply any sort of connection or relationship. He doesn't give me tips. I don't feel like I'm in competition. I've learned a lot from reading his annual reports and going to his annual meetings."
Weitz took it as the ultimate complement when Buffett was once quoted as saying something to the effect, "There's a lot of people who try to ride my coattails, but Wally isn't one of them."
An early start in stock investing
An affable man with a boyish crackle in his voice, Weitz is quick to tell a joke. But in the next instance, he's likely to go into a long-winded analysis of some stock you've never heard of.
Raised in New Orleans, he got interested in investing when he went with his mother to visit a stockbroker in New York City. His mother was a social worker and a single mom who "never had a dime." She was bored; Weitz was mesmerized.
It wasn't long before he was trading stocks. His first purchase: 10 shares of General Telephone & Electronics at 26-3/8 in 1961.
"I started investing my grass-cutting money," Weitz said. "I've been a saver since I was five."
By the time he was in high school, he was keeping charts on 100 stocks that he would update manually every day after the market closed.
"Some kids get really interested in science and turn out to be doctors, and others are avid sports nuts," Weitz said, trying to explain his lifelong passion. "It's just always been near the surface of consciousness. It's the thing I'm interested in."
He graduated from Carleton College, a small school in Northfield, Minn., with a degree in economics. After college he worked for brokerages in New York and Omaha before founding his company in 1983.
Golf and charitable groups
A golf buff, Weitz's wife took him to Scotland last year on a golf vacation as a present for his 50th birthday. He's also active in charities such as Community Foundation of Omaha, New Community Development Corp., and Foundation for Community Encouragement.
"In investing, I'm trying to find something that's already there and valuable that other people haven't recognized," Weitz said. "All of the things that draw me (in social work) tend to be smaller, less well-known, less well-established and riskier from a financial point of view. I tend not to be interested in raising another $100 million for the local art museum."
Stocks to own for years
Like Buffett, Weitz looks for stocks that are trading at a discount from what he thinks they're worth. He hangs onto stocks for an average of four years, but has owned some names for as long as 15 years.
Weitz is also not afraid to hold cash. His cash levels have been as high as 40 percent, but are at 20 percent in Weitz Value Fund and 25 percent for Weitz Partners Value Fund.
And like Buffett, he stays away from complicated tech stocks in favor of businesses that he can understand.
"I think it would be too risky to buy stocks I don't understand at prices that I think are crazy just because they are moving," Weitz said.
Both of the funds Weitz manages also have healthy stakes in Buffett's legendary Berkshire Hathaway (BRK.B: Research, Estimates), which he has owned since the 1970s. While Buffett's returns have suffered in the past year, Weitz doesn't think Buffett is losing his touch.
"He's made 30 percent a year from 1956 to 1970," Weitz said. "Going forward, he has a great collection of assets. I'm buying it now. People say he doesn't understand technology, and that he's living in the past. He would say he's looking for the very high probability bets to make."
A helping hand from cable and telecoms
Weitz said his funds did better than other value funds in 1999 because he had a big investment in cable and telecom stocks earlier in the decade. Other traditional value investors were wary about the stocks back then, because the companies had big debt loads. But Weitz believed in the underlying businesses, and his bet paid off last year as the sector soared.
"Maybe we've been more willing to take a chance of being out of step," Weitz said.
Now that cable and cellular prices are rising so much, he's been selling his holdings such as Comcast (CMCSK: Research, Estimates), but still owns stocks that haven't skyrocketed such as Adelphia Communications (ADLAC: Research, Estimates).
New bargains?
Looking ahead, Weitz is finding good values in such financial stocks as Washington Mutual (WM: Research, Estimates) and Greenpoint Financial (GPT: Research, Estimates). He predicted the stocks will go from trading at seven times earnings to 10 times earnings, plus 5 percent a year dividends -- a 40 percent rise with very little risk.
"We're adding to these as they've been going down," Weitz said. "The interest rate problem is making them cheap."
Weitz also likes Real Estate Investment Trusts (REITs) such as Host Marriott Corp. (HMT: Research, Estimates). Among individual stocks, he's optimistic about Western Resources (WR: Research, Estimates), which has a strong utility business in the Midwest. The company has been hurt by its home security business.
As far as the rest of the market -- the volatility and the crazy valuations -- Weitz isn't making any predictions.
"Some sensible people did some sensible buying in some great businesses a while back," Weitz said. "The buying made the stocks go up. And later on the stocks that were going up attracted more money. It's a positive feedback loop that's gotten out of hand."
Sometimes he finds himself shaking his head after he visits Wall Street because money managers are so caught up in day-to-day performance. He described it as a "manic depressive atmosphere."
Weitz, who invests all of his own money in the funds, isn't planning on changing his ways just to fit in.
"I tell investors if they want to get something different they have to go somewhere else." 
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