Bill Miller

[dash]

[rffrydr]

Miller's biggest holdings in "safe" GSEs--he wanted to be long housing it would have been better to double-up on the dreaded homebuilders. So much is lost through "hedging" one's bets. That's a lesson for any market condition.
_________________
Today is the Tomorrow you worried about Yesterday!

[mtvk]

As regard to Jeremy Grantham:

He was extremely bullish on REITs and Emerging markets in 2002.
He is not a "perma bear" as told by the so called wall street liers.

His projections are common sense based. His theory always been
"reversion to mean". He is saying now, in the next 7 years the
high quality blue chip US stocks will outperform all asset categories.

Wall street pumpers who keep calling him as "perma bear"
like telling every one to keep buying all the time US equities.
They never ever mention about how diversified the portfolio has to be
so that you reduce risk from individual stocks, managers, asset class,
timing etc., at the same time have a good return with all the time
to spend in other things in life.

[Odysseus]

I cannot link but there is an excellent discussion by Jim Grant in his August 8th issue that contrasts Bill Miller and Grantham.

The jist was that Miller is a really smart guy in Bull markets and Grantham is a really smart guy in all markets.

He chides Grantham for a speech he gave on CNBC in 1998 when he said he expected the S&P to return a negative 1.3% through 2008. The actual number is zero. Grantham was too negative!
_________________
Psychic with Alzheimers. I can predict what I will forget.

[HenryTo]

Massachusetts state pension fund dumps Miller and three other active managers in the domestic equity allocation. Also signals that they will ultimately shift all US equity strategies into pure indexing strategies:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aSr4yMDi4uBA&refer=home

[HenryTo]

I doubt they will kick Bill Miller out of running Legg Mason Value Trust. Legg runs several other fund families, such as Royce, Western Asset, Brandywine, etc. Total assets under management are about $950 billion.

The Legg Mason brand name funds run about $100 billion (in mutual funds, separate accounts, commingled funds, etc) and Bill Miller is their biggest brand name by far (although one can probably count Rob Hagstrom as well). A recovery relative to the S&P 500 this year is probably off the table (it is now down about 35% YTD and trailing the S&P 500 by nearly 19%) but if Miller can put in a solid year in 2009, then they can probably start selling him again:

http://quicktake.morningstar.com/FundNet/TotalReturns.aspx?Country=USA&Symbol=LMNVX

It is all about gathering assets and I don't know if anyone else at Legg Mason can take on that role. The days of the "star manager" are definitely numbered. How many fund managers at Fidelity, American Funds, or Dodge & Cox can you name?

[rffrydr]

He put on the hedge-fund hat in Yahoo (after faling the same in CFC). If he could have pulled it off....
_________________
Today is the Tomorrow you worried about Yesterday!

[diesel]

Is Bill Miller Toast?

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/04/AR2008070401108.html

[HenryTo]

Bill Miller's interview on Morningstar:

http://link.brightcove.com/services/link/bcpid1213900505/bctid1541020336

[HenryTo]

Odysseus,

The fund's mantra has drifted between pure value or growth at a reasonable price.

Not quite sure I get your drift. The institutional world drives investment trends and fads but they are subjected to many self-imposed and obviously reaction constraints. In terms of the hedge fund, it is also driven by quarterly and annual performance numbers, and measurements on style drift. Short-term focus can be somewhat bad at mutual funds as well but nowhere near as bad.

best regards,

Henry

[Odysseus]

Henry,
So institutional money is the dumb money? Not taking issue here. I just want to know who to bet against.

I've never followed Bill Miller so I don't want to step on anyone's toes but his top holdings are Amazon, Yahoo, Ebay, Sears and Fannie Mae? He is a value investor?

The poor guy probably learned to read a balance sheet at ITT Tech. Wait a minute, Fannie's balance sheet is at the Fed. That should make it as sound as the dollar.

Sorry. Just got back from the dentist!
_________________
Psychic with Alzheimers. I can predict what I will forget.

[HenryTo]

I agree with Bill Miller that commodities are really the wild card over the next 12 to 24 months. I don't think the commodity (or maybe just oil?) bull market is over yet - at least not until I can see the widespread commercialization/adoption of plug-in hybrids, solar, or nuclear energy in the horizon. That being said, I believe oil is due to take a breather here and should sell off back to $100 or so in the next few months.

Bill, regarding your question on institutional thoughts. Keep in mind that these guys are all thinking from the institutional perspective. The retail business is a horrible business to be in given indexation, the fickle mind of the retail investor, as well as the "institutionalization" of the entire business. i.e. Many retail investors are now investing in mutual funds via their 401(k)s or other DC schemes rather than buying them in their retail accounts or IRAs.

In the institutional world, relative performance is king. Asset allocation decisions are made at the board/investment consultant level. If they want to get equity exposure with a value "bent," they buy the Legg Mason Value Trust. They do not expect them to put 30% of their capital into cash and would promptly fire them if they do even if they outperformed their benchmarks. If a pension fund wants to go into cash, then they merely sell their holdings in this fund. In short, guys like Bill Miller are paid to make asset allocation decisions among large cap stocks only and nothing else. We have continued to keep a close eye on Miller's investment process as well as the fund's management team, etc, and we still like what we see from a large cap value standpoint.

[nodoodahs]

From a retail perspective, I agree totally. There's really no excuse for even the laziest retail scrub to have not averaged at least 8-10% annually over any timeframe longer than 5 years. The data and methods are out there and easily available.

From an institutional perspective, I guess it depends.

Imagine an institution that doesn't care about fixing or determining asset allocations per se, they just have an absolute benchmark to meet, and are willing to pursue that goal in a wholehearted way. They probably look at Bill Miller's current long-term returns and shake their head.

On the other hand, if the institution does care about a fixed asset allocation method, and are choosing relative performers vs. benchmark based on a long track record, Bill Miller still looks good. Especially so if they buy into the methodology he uses.

Henry, your thoughts on insitutional opinions?
_________________
I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[Odysseus]

Sad to say but you can't eat relative performance. They would have been better off rolling 10 year notes for the last 10 years.

This guy still has a job?
_________________
Psychic with Alzheimers. I can predict what I will forget.

[rffrydr]

Miller commentary on the fatefullness of numbers. He keeps the flame burning:

http://www.leggmason.com/individualinvestors/documents/insights/D6053-Miller_shareholder_1Q08_report.pdf
_________________
Today is the Tomorrow you worried about Yesterday!

[rffrydr]

So....what's this with the auction-rates and CEFs?

http://www.cnbc.com/id/23844397
_________________
Today is the Tomorrow you worried about Yesterday!