For some investors August was an opportunity, others kept their heads down and big name fund managers watched their reputations crumble.

When the market started to crash in August one investor put stop-losses on all the companies that were doing well, and held on to her losers.
Then, unrepentant, she went on holiday, having sold her winners and lost all the gains she'd made in 2011.

Volatility is opportunity, it's the price we have to pay for longer-term performance
Value investors estimate how much an investment is truly worth as opposed to how much other people determine its worth in the market. The difference between the two is the value investor's opportunity, and its greatest when the market is most volatile, says Kevin Murphy.

Defensive telecoms and health companies are back at lows. Cyclical industrials still way above theirs. Defensives are better value right? Wrong.
The guys at Schroder have their rose-tinted specs on. Cyclicals, they say are much less risky than they were in the depths of the credit crunch. Real risk isn't volatility in the market (that's opportunity – see above). Real risk is indebtedness and after two years of cost cutting and cash generation, cyclicals are in good shape, and good value.

Paulson down 39%, Berkowitz and Gross among the worst performers in their fund categories. Can they come back?
Giants of fund management Berkowitz and Paulson bet on banks as confidence once again drained from the market. Gross avoided US treasuries while the market couldn't get enough of them. One lesson is the views from 'masters of the universe' can look hopelessly naive nine months on. The recovery was only beginning, said Paulson earlier in the year, and his fund had been spent a year and half 'restructuring investments in deeply distressed prices to maximise gains.'

Will they join Bill Miller in the hall of fallen greats? Really we need to wait until the end of their careers to appraise them. Even Miller, the worst performer in his category in the last five years, could stage a recovery. But they look like gamblers who put a big wodge of money on red, and it came up black.

Talking of Miller, he beat the index for 15 straight years, but maybe the following five were more significant…
Turnkey Analyst compared actual returns from Miller's Legg Mason Value Trust to back-tests of two simple quantitative strategies. In the 15 good years they tied. Then came the credit crunch. The quant strategies lost money, but Miller was murdered. Bad news for stock-pickers? Miller's just one, of course, but the blog recommends benchmarking stock-pickers against simple quant models like the Magic Formula, instead of indices, and watching stock-pickers most closely during bear markets.