closer:

 " He sees the selling of financials with " 'squeaky clean' balance sheets" like MetLife Inc. and Travelers Cos. as "mindless...Sometimes I sit here scratching my head....It's a financial, so people just sell it."

I found myself holding 3 squeaky-clean insurance stocks, including TRV, labeled as "deep value--patience!" in my portfolio. Then it occurred to me what happens to insurance companies in bear markets: all their reserves, mostly invested in equities, evaporate, and they run into cash flow problems. And if they have to raise more capital?  I thought about it for just one day, and sold. Was that irrational?

The larger point is valid, though. Funds managers at their best can beat the market by a few points. And the flight of capital in down markets keeps them from buying bargains at the bottom, so they can rarely do their best.

--Aalan