Bill Miller

[dash]

[rffrydr]

ASX down five days in row (shout-out Goodfella) and Chinese steel inventories should tatter that pricing umbrella by Christmas (no favors from today's durables)--in any case, what he's really been riding and won't say is the steel buyout binge. To admit that would be out of character.

As is well known I like the contrarian play but still won't touch the builders. "Every time" is a deceptive guide when it comes to RE. 1990, 1979? The cycle is so long and the prejudice is so strong that it loses its meaning vis-a-vis an investment window. We've discussed how fallow land is "bgooked" in these dogs--and how the marketability of that land is driving excess production even now. Besides he's been in these bombs so long it wasn't really a contrarian play--still the faith of bubble there I suppose. 20 years of capital markets ascendency with ever more refined levels of indexing and these traders don't know how to handle "time-frames."
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Miller not an iPhone fan:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJvVBlcq3HNU&refer=home
_________________
Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Money Magazine article on Bill Miller. Includes a discussion on his investment philosophy, on playing poker, and who he thinks will be a good successor to Warren Buffett at Berkshire Hathaway:

http://money.cnn.com/galleries/2007/moneymag/0707/gallery.bill_miller_interview.moneymag/index.html

[HenryTo]

Bill Miller's flagship fund, the Value Trust fund, is now down 0.70% on a YTD basis as of August 7th.

Besides the homebuilders and Sprint, there have been other laggards in his top 25 holdings, such as Tyco (+0.12%), AES (-16.83%), and UnitedHealth (-10.63%):

http://quicktake.morningstar.com/fundnet/Holdings.aspx?Country=USA&Symbol=LMVTX&fdtab=portfolio

[HenryTo]

Bill Miller is selling his mid cap holdings and buying mega caps. However, he is still keeping his homebuilder stocks:

http://www.bloomberg.com/apps/news?pid=20601109&sid=aswvW0o_jgek&refer=exclusive

[HenryTo]

Legg Mason was the only top 10 mutual fund family to have net withdrawals this year, as Bill Miller continues to suffer from wrong-way bets:

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

[HenryTo]

Bill Miller's take on the US stock market and US-based assets:

http://www.bloomberg.com/apps/news?pid=20601087&sid=as2ae85nP03g&refer=home

[HenryTo]

Full text of Bill Miller's 3Q commentary:

http://www.lmcm.com/pdf/miller_commentary/2007-11_miller_commentary.pdf

[HenryTo]

Bill Miller on Citigroup, and financial stocks and retailers in general:

http://money.cnn.com/2007/12/04/news/companies/miller_citigroup/index.htm?postversion=2007120506

Note that Bill Miller's flagship fund, the Value Trust fund, is now down 1.91% on a YTD basis as of December 7th, putting in in the 97th performance percentile for the Morningstar large cap blend universe:

http://quicktake.morningstar.com/fundnet/TotalReturns.aspx?Country=USA&Symbol=LMVTX

[HenryTo]

Legg Mason on the current turmoil in the US credit markets:

http://www.ft.com/cms/s/0/7c9ad16c-a2d4-11dc-81c4-0000779fd2ac.html

[HenryTo]

FYI. Since the end of November, Bill Miller's Legg Mason Value Trust has continued to underperform the S&P 500. As of yesterday at the close, the Legg Mason Value Institutional Fund is down 3.41% on a YTD basis, trailing the S&P 500 (total return) by 10.26%. This is on top of the 8.87% of underperformance in 2006.

[HenryTo]

A take on Bill Miller's performance this year, and last year:
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Legg's Miller lags benchmark for 2nd year
Wednesday January 2, 4:50 pm ET
By Muralikumar Anantharaman

BOSTON (Reuters) - Money manager Bill Miller's performance in a key fund fell far short of its benchmark index for the second straight year in 2007, as his bets on financials and housing shares soured.

The $17.3 billion Legg Mason Value Trust fund, which Miller guided to 15 straight years of outperformance against the S&P 500 index until 2006, returned a negative 6.66 percent last year against a positive 5.50 percent return for the S&P index.

Before 2006, the fund's last underperforming year was also the last time it fell two years in a row, in 1989-90.

According to research firm Lipper Inc, the fund was the worst performer last year among all large-cap growth funds it tracks. In 2006, it returned just 5.9 percent against the S&P index's 15.8 percent return.

"It's tough to say right now as to what the future holds for this fund's performance in 2008. But Bill Miller has a deserved reputation as being an astute investor and I would still give him another opportunity," said Jeff Tjornehoj, senior research analyst at Lipper.

Miller, 57, usually makes big bets on a small number of stocks. The Value Trust fund, which he co-managed since its inception in 1982 before taking over sole management in 1991, had invested in 45 stocks at the end of September.

While that strategy can pay off handsomely -- as in the case of Google Inc (NasdaqGS:GOOG - News), which Miller bought at the time of its IPO in 2004 -- it can also bring pain when markets drop.

The fund's holdings of Citigroup Inc (NYSE:C - News), Countrywide Financial Corp (NYSE:CFC - News), Centex Corp (NYSE:CTX - News), KB Home (NYSE:KBH - News) and Pulte Homes Inc (NYSE:PHM - News) bled due to the impact of the subprime mortgage and credit crises.

Amazon.com Inc (NasdaqGS:AMZN - News), whose decline was responsible for some of the Value Trust fund's pain in 2006, was a huge winner for it in 2007. Shares of the Web retailer gained 135 percent in 2007 and it was the fund's top holding at the end of September with a market value of $1.7 billion.

WILL HISTORY REPEAT?

But Sprint Nextel Corp (NYSE:S - News) and Qwest Communications (NYSE:Q - News), both among the top five holdings of the fund as of end-September, fell in 2007.

"There were some very bright spots in the portfolio, there just weren't enough to overcome the disappointers," said Tjornehoj of Lipper.

Miller's sub-par performance contributed to investors pulling a total of about $9.6 billion from Baltimore-based Legg Mason Inc's (NYSE:LM - News) stock portfolios in the quarter ending September, analysts have said.

Acknowledging the recent poor showing of the fund in a November letter to investors, Miller said he would cut holdings of many of its biggest stocks, buy into new sectors and also cut holdings of smaller stocks in favor of bigger ones.

He also drew a parallel between the market environment in 1990, when the fund last underperformed the S&P index two years in a row, and now, saying a housing recession and swooning financial stocks then had enabled the fund to take advantage of good values to begin a sustained period of outperformance.

"While the past may not repeat itself, it does often rhyme, as Mark Twain once said," wrote Miller. The Value Trust fund has returned 13.24 percent a year against the S&P index's 10.50 percent return over a 15-year period, as per Lipper data.

Some feel the past could very well rhyme now.

"In my opinion, it's the time that I would be giving Bill Miller money to invest after he's had a couple of bad years, rather than running away from him," said Russell Croft, a portfolio manager at Baltimore-based Croft Funds Corp.

[HenryTo]

For those who simply buy mutual funds for their portfolios, my sense is that Bill Miller's "flagship fund," the Legg Mason Value Trust will outperform going forward, given its domestic focus and its historic underweight of both the energy and materials sectors:

http://quicktake.morningstar.com/fundnet/TotalReturns.aspx?Country=USA&Symbol=LMVTX

This coincides with my view that consumer discretionary, financials, telecom, and tech will outperform going forward. Despite Miller's dismal five-year record, its ten-year record still remains solid.

[diesel]

Henry, you had mentioned that you expect consumer staples and healthcare to do well this year. Is this still the case or do you now expect consumer discretionary, financials, telecom, and tech to outperform those sectors?

Thanks..