Bill Miller's record since 2006--the end of his phenomenal 15-year run of beating the S&P 500--has been somewhat spotty. He's had good years (2009), bad years (2008), and some mediocre years. This year, unfortunately, he's staring at another bad year.

So far in 2011, the Legg Mason Capital Management Value Trust fund has sorely lagged the S&P all over again. It's only a few percentage points above breaking even. And once again, one of the main culprits is the financial sector. Miller's fund remains chock full of financial stocks, the likes of Bank of America, Citigroup, BlackRock, JPMorgan Chase and others. That's not to say that he hasn't had bad luck with other stocks. Recall that the firm took a $550 million loss on his once massive stake in that old blue-chip stock Eastman Kodak when he liquidated his position in June.

It's fair to say the bloom is still off the rose when it comes to value investing. At the moment it looks like a sure fire strategy for holding onto losers that remain out of favor for much longer than the old value crowd would have ever believed. Investors are voting with their money. Forbes notes that Value Trust's assets under management "have shrunk to $3.5 billion, from $16.5 billion in 2007, due to investment losses and investor redemptions. The fund is near the bottom rank of its Morningstar category."

And you have to think things could easily get worse before they get better.

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