Yes, the fund dropped 60%, and yes it held mortgage bond insurance companies other than MBI. Yes, it was painful. But it wasn't that much worse than the typical LCV fund. Here's a chart for peak to trough of the fund 10/11/07 to 3/9/09.
It lost 61.34%. A LCV index fund (VVIAX) lost 58.97%. TAVFX did worse, sure. A lot worse? No. If you want to use the word "implode", it's the value side of the market that imploded. "Value trap" implies active stock selection, but passive management did just about as poorly. Whitman made some mistakes but he must have made a number of good calls as well to have come out average.
Meanwhile, TAVFX's cumulative 10-year returns are less than one-fifth the broad market's.
That's the post-Whitman era, which was my original point. He resigned as CIO over a decade ago, and as manager of TAVFX nine years ago. Without Whitman the fund has indeed turned in an absolutely abysmal performance - bottom 3% (though not quite as small as 1/5, closer to 1/3 as much total gain as that of the entire equity market). A whole lot worse on a relative basis than Whitman did before, during, and after the housing crisis.
Regarding the particular mortgage bond insurers it held between Oct 2007 and March 2009, does it really matter? In Oct 2007 MBI constituted 64% of these holdings. FWIW, Radian (which M* says was primarily in other businesses) constituted 27%. The rest was noise.
I recall that Whitman was involved in public disputes with another investor who was shorting that industry
From the NYTimes (repeating a link from above):

“MBIA is being victimized by an apparently well organized bear raid headed by William Ackman of Pershing Square Capital Management,” Mr. Whitman wrote.

Interesting read... Last post was 2016 but guess which suggestion looks terrific after 4 years? PRBLX and DSENX Nicely done @davidrmoran @benwp

Never underestimate the fund industry's ability to capitalize on any situation. From the prospectus:
The Index Provider then matches each company’s country of risk against that country’s “Democracy Score” assigned by The Economist Intelligence Unit Ltd.’s Democracy Index. A country’s Democracy Score can range from 0-10 and is a composite of sixty indicators, which are grouped into the following five categories:
1. Electoral process and pluralism
2. Civil liberties
3. The functioning of government
4. Political participation
5. Political culture

I thought bitcoin was all grown up as an investment and had cleaned up its act:
https://news.yahoo.com/exclusive-large-bitcoin-payments-to-rightwing-activists-a-month-before-capitol-riot-linked-to-foreign-account-181954668.html

Looking once again at those investor reports brings back awful memories. (That's possibly a good thing in the current environment.) It wasn't just MBIA; TAVFX went long on Ambac, Radian, MGIC, and added to its pain by investing in MBIA bonds. I recall that Whitman was involved in public disputes with another investor who was shorting that industry. Between October 2007 and March 2009, TAVFX lost over 60% of its value, measurably worse than the market overall. I was a DODGX investor at the same time. It kept pace with TAVFX's losses. In contrast to the outperformance "value" experienced during the tech wreck earlier in the decade, which probably lulled me into a false sense of security, the housing crisis exposed the propensity of more than a few "value funds" to fall into "value traps." Did I learn the lessons I should have? Some, certainly, but probably not all. Meanwhile, TAVFX's cumulative 10-year returns are less than one-fifth the broad market's.

Fed Chair Powell: 'Be careful not to exit too early' on easy monetary policy
"But Powell’s commentary may be an attempt to quell any jitteriness over the Fed pulling back on its accommodative policy. Fed Vice Chairman Richard Clarida said Wednesday that he expects the Fed to keep up its pace of asset purchases through 2021."
Got to keep those bubbles inflated! 2021 will likely be a decent year for equities. Amazing financial system we have here in the US. Simply amazing.

– Why money supply expansion is not equal to inflation
– Understanding the new rules of bond investing in today’s inflation and interest rate environment
– How to protect your portfolio against inflation
– Whether there is a rational argument for stocks to be trading at 50 times earnings

2021-world-podcast-tour-begins
Understanding Money:
https://orcamgroup.com/understanding-money/
Cullen's Blog Posts:
https://pragcap.com/

There's no question that he was way wrong about mortgage insurance companies. However, despite this moderate sized bet, the fund performed respectably before and during the housing crisis.
Let's put some dates and numbers to paper. MBI would seem to be a good proxy for his investments in the mortgage insurance business (what in the annual statements is counted in "Financial Insurance/Credit Enhancement").
Oct 31, 2008: 3.57% of portfolio in financial ins., all MBI.
Oct 31,2007: 3.95% in financial ins., 64% of that in MBI.
Oct 31, 2006: 3.55% in financial ins., 65% of that in MBI.
I'm not going back further. MBI's stock price peaked just before the end of 2006 (Dec 28 close of 73.31 per Yahoo). "In 2007, home prices started to tumble." NPR.
From Dec 28, 2006 to March 5, 2008 (the low point for MBI), TAVFX outperformed the average large cap value fund by over 2% (not annualized) while underperforming VEIRX by about 1%.
M* chart.
In January 2008 the fund owned about 10% of MBI. That mistake by Whitman of doubling down brought its percentage of the fund's portfolio to around 5% (end of January N-Q). With the stock declining from his purchase price of $12.15 to a low of $2.29 on March 5, 2008 the position contributed around -4% to the fund's performance. Since then, MBI has gently risen in price.
Though his bets on mortgage insurers had a measurable impact on fund performance, bringing down a once superior fund to an average performing one, they did not seem to be the cause of the subsequent "implosion". That came later.
The fund started to underperform in the 2nd half of 2008, well after MBI had stabilized. Even at that, it had its moments and performed in line with large cap value funds until just a few months before Whitman resigned as manager, March 3, 2012.
M* chart 2008-March 3, 2012.

Here is the registration filing:
https://www.sec.gov/Archives/edgar/data/1579982/000110465921003837/tm212832d1_485apos.htm

Not that lottery tickets are really investments, but then again, neither are some popular stocks and ETFs:
https://finance.yahoo.com/news/why-a-bigger-mega-millions-and-powerball-jackpot-can-actually-be-the-worse-time-to-buy-a-lottery-ticket-215219163.html

Mohamed El-Erian sees one risk that could get investors into serious trouble.
"One of the most under covered stories is what’s happening to the US yield curve..."

To me, he fall in the camp with Grantham, Hussman & Dr Doom. They all are right, but stimulus creates price momentum and price momentum fuels animal spirits. This, along with low inflation, low interest rates, and low wages, cloud their conclusions. Until then these things change (higher inflation, interest rates & wage growth) they will appear to be crying wolf.
He's article:
mohamed-el-erian-this-is-starting-to-get-to-dangerous-levels
Article on Yield Curve Targeting:

The new tool could enable the Fed to keep yields lower for longer, without necessarily continuing to expand its balance sheet.

yield-curve-targeting

I ALWAYS look at the following: PM status/history, sector weightings, G/B/V and L/M/S splatters, top 10 holdings, SD, Sharpe, Sortino & Capture Ratios, 1-3-5-10 Yr TRs.

What would be the purpose ultimately? You would bail or add depending on something you saw? Really?

Absolutely I would, yes. Both single-stocks or general allocations, especially in their top-10 percentage.

@rforno et al
Y'all may not "hear" the lyric as I do; but when this popped into my head I heard the current group of traders looking for and chasing the stars and hoping to find lasting monetary love. NO, I'm not knocking the trader folks, and hope most prosper and learn. Covid has brought forth many changes, semi-permanent or not.
Frank Sinatra/Count Basie.....1964, Fly me to the Moon
Fly me to the moon
Let me play among the stars
Let me see what spring is like
On a, Jupiter and Mars
In other words, hold my hand
In other words, baby, kiss me
Fill my heart with song
And let me sing for ever more
You are all I long for
All I worship and adore
In other words, please be true
In other words, I love you
Fill my heart with song
Let me sing for ever more
You are all I long for
All I worship and adore
In other words, please be true
In other words, in other words
I love you.

It's slightly more complicated than OJ described, but that's the general idea.
The checks (or deposits or debit cards) are based on your 2019 AGI. If your 2020 AGI is higher, you won't get any more but you get to keep the extra amount. So if you qualified for a check based on 2019 AGI while your 2020 AGI disqualified you, consider yourself lucky.
Conversely, if your 2020 AGI is lower than your 2019 AGI and so you are eligible to receive a greater amount, you'll get that extra amount in the form of a rebate on your 2020 tax return.

We always verify current or possible holdings to discover what is inside. 'Course, the contents are subject to change somewhat over time frames.
And to the proposition of an investment into SPY where many may presume an equal weight of holdings among 11 sectors. NOPE. Tis not a balanced U.S. equity holding. We hold 3 of these equity sectors: tech., healthcare and comm. services for our current choices.

Sectors	Fund %	Cat %
Basic Materials	2.42	2.61
Consumer Cyclical	12.66	11.17
Financial Services	13.90	13.42
Real Estate	2.29	2.47
Communication Services	10.26	10.21
Energy	2.60	1.90
Industrials	8.83	10.11
Technology	23.82	22.81
Consumer Defensive	6.78	7.99
Healthcare	13.77	14.76
Utilities	2.67	2.54

SP-500 sector weighing
Regards,
Catch

The ARKs are starting to feel like a bubble to me. Very 1999-like .... what's next? A Cannibus Tech ETF? How about a Tech-Tech ETF? I'm sure the RH'ers will be all over this -- they see ARK and are attracted to it like moths to a flame, at least based on the past year in ARKK and some of their other ones.
Yes, I'm a bit cynical here. They can't always create 'winners' imho.

@Mark- Yes sir, I gave that a try. From the FAQs I noted that the cap is-
• $150,000 if married and filing a joint return
OK, I know that our income from SS & pensions is somewhat over that number. But then it says-
• Your payment will be reduced by 5% of the amount by which your AGI exceeds the applicable threshold above.
So what the heck does that mean? If our income was-
$1000 over that amount, would the $1200 payment be reduced by $50?
$5000 over that amount, would the $1200 payment be reduced by $250?
$10000 over that amount, would the $1200 payment be reduced by $500?
$20000 over that amount, would the $1200 payment be reduced by $1000?
$25000 over that amount, would the $1200 payment be reduced by $1250?
If that's the way it works, then the $1200 payment is probably close to being reduced to 0. But it would be nice to just get a "yes" or "no" answer. It's not as if they don't know.