Firms that focus on value stocks have been slammed recently, as financial stocks like Freddie Mac and Fannie Mae continue to struggle, reports The Wall Street Journal.

Several superstar managers of mutual funds and hedge funds are down 20% or more this year, depending on how heavily they are invested in big-name financials. Some value investors like FPA Capital Fund’s Robert Rodriguez are up this year, thanks to large cash holdings.

Legg Mason’s Bill Miller remains in a slump, with his funds now among the worst in their category for the last three, five and 10 years. Doubling down on financials Freddie Mac and Wachovia Corp. earlier this year certainly didn’t help Miller.

Legg Mason is the second-largest stockholder of Sears, which is down about 25% this year.

Some question whether these managers are too close to their picks to dump the losers.

"These are not the most enjoyable of times," admitted Richard Pzena, of Pzena Investment Management. "But this is a once-in-a-lifetime opportunity for valuations, for all financials. When we look back historically, we will be writing about the irrational panic of 2007 and 2008."

In the past, Pzena dumped several of his favorite stocks when their prospects dropped, but he is currently holding on to shares like Fannie, Freddie and Citigroup Inc.

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