Johnny Cash's rendition of the song, "Danny Boy," was playing Tuesday afternoon as more than 300 investors, juggling coffee cups and finger food, slowly made their way into the ballroom of the Pittsburgh Marriott North in Cranberry.

The pipes were calling them to the semiannual seminar hosted Ron Muhlenkamp, manager of the Muhlenkamp Fund [Ticker: MUHLX]. Through Thursday, the fund was down 54 percent this year after generating a loss of nearly 10 percent last year. That was its worst yearly performance since a 20 percent loss in 2002.

The fund's assets shrunk from $3 billion at the end of 2005 to $704 million as of Oct. 31. After making Forbes' honor roll of fund managers for seven consecutive years, the magazine said Mr. Muhlenkamp didn't qualify this year, citing large positions he took in Countrywide Financial and insurer AIG. Morningstar has knocked the fund down to a two-star rating.

Given the performance, perhaps Mr. Cash's song, "Ring of Fire," would have been more appropriate.

But the crowd, dominated by the over-50 set, was not out for blood. Many are longtime investors who have stuck by Mr. Muhlenkamp, who holds an engineering degree from the Massachusetts Institute of Technology and a Harvard M.B.A. Gone are the fickle investors lured by the fund's 48 percent gain in 2003 only to leave later.

"If you have three good years, they send you money. If you have one bad year, they take it back," Mr. Muhlenkamp said in an interview.

So, for the next hour or so, the faithful listened eagerly to what Mr. Muhlenkamp had to say about where the fund had been and where it's going.

The fund manager admitted he could have done a better job picking up on signs of weakening in financial, home building and energy stocks, comparing his slowness to react to market changes to consumers who were slow to cut spending as the threat of a recession grew.

"That's about as well as I can tap dance," he said.

As for the future, Mr. Muhlenkamp said the fund has 20 percent to 30 percent of its assets in cash, the largest percentage since 1998 before the tech stock bubble burst. He told them he's cautiously deploying some of it, buying battered blue chips such as General Electric, 3M, Bank of America, IBM, Cisco and Oracle. They are Cadillacs with Chevrolet price tags, he told the crowd.

"When the Cadillacs are on sale, you start with the Cadillacs," he said. "We own more technology than I ever have."

Mr. Muhlenkamp, 64, also said that for the first time in his life, he owns a substantial number of shares of Berkshire Hathaway, run by legendary investor Warren Buffett. Berkshire's recent purchases of preferred stock in General Electric and Goldman Sachs offer 10 percent yields, coattails that Mr. Muhlenkamp said he was happy to ride.

Like other investment managers, Mr. Muhlenkamp is wary of the constantly shifting rules that have characterized attempts to regulate the markets.

He also is concerned about additional damage that could be inflicted by accounting rules requiring financial institutions to value securities based on current market prices, no matter how unrealistic and distorted those prices are.

Mr. Muhlenkamp said bankers don't like the so-called mark-to-market rules because the more they have to mark down the value of their securities, the less they can lend.

"The fundamental premise behind mark-to-market is that the market price is always fair," he said in an interview.

If the accounting rule were suspended -- something the Securities and Exchange Commission was authorized to do under the Emergency Economic Stabilization Act -- Mr. Muhlenkamp said he'd be more inclined to buy more stock. Given the uncertainty, he recommended selected buying.

"You don't have to spend your last nickel, but do some of it," he said.

He spoke the day before the Dow Jones industrial average shed another 10 percent over a two-day stretch, tumbling to levels last seen in March 2003.

Mr. Muhlenkamp launched his fund in 1988, months after what was then a record-breaking, 508-point one-day drop in the Dow. Two decades later, such declines are regular occurrences, confounding even seasoned investment managers.

Over the life of the fund, Mr. Muhlenkamp has regularly outperformed the Standard & Poor's 500, racking up annualized returns of 10.9 percent since the end of 1988 through October, vs. the 8.8 percent return offered by the S&P 500.

His long-term record is one reason Morningstar analyst Greg Carlson still likes the fund.

"This has long been a streaky fund that's too volatile to be a core holding for most investors, but we think it's a fine choice," he wrote in a Nov. 6 report. "The best time to buy the fund typically has been after a tough stretch."

Stretches don't get much tougher than they have been of late. Mr. Muhlenkamp said it can't last forever. "I just can't tell you when this whole thing turns."