Image: Stock market Traders © Colin Anderson, Jupiterimages

History and horizon. The challenge of investing is to keep an eye on each: to read the lessons of markets gone by while simultaneously focusing on the opportunities ahead. One eye on the past, the other on the future -- it's a wonder any investor can walk at all. And yet the great ones not only walk, they fly.

With that in mind, each year SmartMoney reporters go through a ritual of sorts: staring out the windows in search of any pinstriped figures soaring across the skyline. And this year, moreover, we added one more challenge to the effort: finding those who had managed to stay airborne in the tumult of the crash and recovery.

That, indeed, was a bar few could meet: Among the cast of headliner investors, hardly anyone -- not even the bespectacled Nebraskan who almost always makes our list (sorry, Warren) -- thrived in the crucible of the past three years. Hardly anyone, sure. But these four fund managers did.

Over the same stretch, this group of steady fliers posted an average total return of more than 13%, outpacing the Standard & Poor's 500 Index ($INX) by 10 percentage points -- with each following a strategy well made for these strange and unforgiving times. We think that's an achievement worth singling out.

Here now, the World's Greatest Investors of 2011 -- and what they see on the horizon.

Bill Nygren

Bill Nygren, 52, always wanted to be a portfolio manager. For a college project at the University of Minnesota, he told his classmates he would raise $25 million for his proposed mutual fund.

"I was laughed out of the room," he says. That early focus, though, helped draw the $7 billion in assets he manages in three mutual funds for Chicago's Harris Associates. And that focus may have something to do with the performance of the Oakmark (OAKMX) fund, which has earned a 10-year annualized return of 4.8%, 2.5 percentage points ahead of the S&P 500 for that period -- a record that puts Nygren's fund in the top 10% of the more than 800 large-cap "blended funds" (those that invest in both growth and value stocks) tracked by Morningstar.

Nygren, says Louis Simpson, another famous stock picker who now runs the hedge fund SQ Advisors in Naples, Fla., "is a disciplined investor on price and extremely knowledgeable about companies."

As for discipline, that became clear during the Internet bubble of the late 1990s: Nygren refused to get caught up in the hype even when the blistering performance of Nasdaq's then-dazzling dot-coms was causing him to feel the heat. One broker threatened to sell his fund shares unless Nygren joined the frenzy along with everyone else. Nygren held the line.

Of course, certainty cuts both ways: Nygren was pilloried for clinging to Washington Mutual even as the bank was flushed into receivership amid the whirling chaos of 2008.

"He stuck with WaMu longer than he should have," says Simpson. Nygren agrees. Indeed, that big-swing strike contributed to Oakmark's 4% loss in 2007, and to a more dismal drop of 36% in 2008.

Even so, Nygren, who co-manages Oakmark with Kevin Grant, kept to his disciplined buying. Picking up beaten-down media stocks like Liberty Media Interactive (LINTA, news) and DirecTV (DTV, news) helped fuel a solid comeback over the past two years.

With the past year's rollicking recovery in stocks, it may come as a surprise that Nygren still feels wildly upbeat about where the market is going, predicting rises of nearly 10% annually for the next decade.

"The bears are missing the strength of corporate balance sheets," says Nygren, who points out that the level of cash kept by companies after paying dividends has been on the upswing.

Sitting behind his desk in his Chicago office, the fund manager relates a recent exchange with a shareholder that sums up his investing philosophy: "Most people are soured on technology stocks," the man began, a bit huffily. "Why do you own them?" Nygren took no time in his reply: "You answered your own question."

Nygren's picks

Walt Disney (DIS, news): Nygren says the market has missed the forest for the trees, focusing too much on economy-sensitive theme parks and not enough on the company's fast-growing cable holdings.

TE Connectivity (TEL, news): The cash-generating ability and future earnings power of this conglomerate, formerly known as Tyco Electronics, are not reflected in its share price, he says.

Aflac (AFL, news): The insurer, which draws most of its income from Japan, has been punished too harshly by the stock market in the wake of the recent nuclear catastrophe there.