| Due for a comeback |
| 06/01/09 Buffett Dreman Value Investing Funds Dorfman Miller |
"Some of the nation's best and most famous investors -- Warren Buffett, David Dreman, Ken Heebner and William Miller -- had hideous years in the bear market of 2008. I refuse to believe, though, that people with a long track record of investment prowess have suddenly become stock-market eunuchs."
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| Bill Miller Q3 2008 commentary |
| 11/14/08 Markets Value Investing Government Miller |
"There is little dispute among knowledgeable investors that U.S. (and global) equities are extraordinarily attractive on a wide variety of measures based on historical standards. The worry is they may go a lot lower before they eventually recover, as the current crisis unfolds and as the economy undoubtedly gets worse. This worry is legitimate. After all, to most of us, stocks seemed quite cheap at the end of September, and now they are a whole lot cheaper. So what to do? The data indicate there is now a mountain of cash on the sidelines, enough in money market funds to buy about half the market capitalization of the S&P 500."
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| Value stock losers Buffett, Miller poised as winners |
| 08/11/08 Buffett Montier Funds Value Investing Miller |
"The five prior times since 1952 that growth beat value two years in a row, the latter group recovered and won by 17 percentage points annually on average for seven years, the data from Societe Generale show. Cheap stocks are becoming more attractive because of tumbling commodity shares, which had led the five-year bull market that ended in October, according to Societe Generale's James Montier"
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| The plight of the value investor |
| 08/09/08 Value Investing Funds Miller |
"This is a tough time to be a value investor. The value philosophy tries to outsmart the stock market by investing in companies that are deemed undervalued, often trading at a low multiple relative to earnings. It was developed by Benjamin Graham and championed by Berkshire Hathaway's (BRK.A) Warren Buffett"
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| Legg Mason Q2 letter |
| 07/30/08 Value Investing Buffett Miller |
"A group of us were standing around a few weeks ago when Warren Buffett wandered over. Chris Davis had dubbed us the Value Support Group, as we all adhered to that approach to investing. We were commiserating over how badly we had done in this market, how valuation appeared not to matter and had not for the past couple of years, how it was all about momentum and trend, and how we were all losing clients and assets over and above our losses in the market. It seemed like we needed a 12-step program to cure us of our addiction to buying beaten-up stocks trading at large discounts to our assessment of their intrinsic value."
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| Overplaying their hand |
| 05/12/08 Stocks Miller |
"There are different kinds of investors in the world. One kind is a long-term patient type who runs mutual funds for the average Joe. A second is a risk arbitrageur - known on Wall Street as an "arb" - who speculates on pending deals. When a proposed takeover surfaces and the target's stock price runs up, Mr. Patience tends to sell to the arbs, happy to take his profit and letting the arbs bear the risk of whether the deal gets done and at what price. Recently, however, two of the biggest and best-known mutual fund investors - Gordon Crawford of Capital Research Global Investors and Bill Miller of the Legg Mason Value Trust (LMVRX) blurred the distinction between the investment and arb worlds, and their shareholders paid the price."
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| Bill Miller Q4 2007 |
| 02/13/08 Funds Miller |
"I believe equity valuations in general are attractive now, and I believe they are compelling in those areas of the market that have performed poorly over the past few years. Traders and those with short attention spans may still be fearful, but long-term investors should be well rewarded by taking advantage of the opportunities in today's stock market."
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| Bill Miller Q3 2007 |
| 12/18/07 Funds Miller |
"Where will the new leadership come from? The same place it usually does: the old laggards. I think the new leadership will be US, large-cap, dollar-based, and grow to encompass what no one wants to own today, especially financials and consumer. I also think so-called growth stocks will continue to do fine. When growth becomes scarcer and the discount rate becomes lower, growth becomes more valuable. More particularly, just as the right thing to do in 2002 was to buy what everyone was panicked about, I think the greatest gains over the next 5 years will be made in those securities people are panicked about today. For specific names, consult the 52-week new low list."
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| Bill Miller Q2 Letter |
| 08/11/07 Miller |
"Owning housing stocks in the midst of the worst housing market in at least 15 years, and one where the problems may linger until 2009, may prompt a reaction similar to that one client had when we bought a company in the midst of a scandal: don.t you read the papers? At LMCM we actually try to buy low and sell high, and you don.t buy low when everything is great and the headlines reflect it. Usually, but not always, when you read about some industry or company having the worst time since some period of years, or even decades ago, you will find that buying that industry or company when it was going through those difficulties proved quite profitable if your time horizon wasn.t measured in days or months. The headlines today are all about this being the worst housing market since the early 1990.s. Had you bought housing stocks during that previous period of duress, you would have made many times your money and handily outperformed the market over the subsequent decade."
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| What's luck got to do with it? |
| 07/18/07 Miller |
"Somebody once asked Bill Ruane [the late manager of the legendary Sequoia Fund], and I happened to be in the audience that day, "How do you learn about investing?" And Bill said, "Well, if you read Ben Graham's Security Analysis and The Intelligent Investor you'll be well versed in it. And then if you read Warren Buffett's shareholder letters and understand them too, you'll know everything there is to know about investing. And you will become a successful investor." And I think Bill was right, but it takes a lot of time to do that. Puggy Pearson made it a little pithier when he said, his line was, "There ain't only three things to gambling. Knowing the 60/40 end of a proposition, money management, and knowing yourself.""
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| Bill Miller, mired in worst slump of career |
| 03/30/07 Miller |
"Miller has stumbled at a critical time for his firm. Legg Mason, which manages about $945 billion, has been trying to meld itself with the fund management arm of Citigroup Inc. Legg Mason swapped its brokerage arm for Citigroup's money management division in 2005, doubling its assets. Miller's Value Trust has fallen further behind the S&P 500 in 2007, with a 1.7 percent loss through March 29, compared with a 0.23 percent decline for the index."
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| Bill Miller's letter |
| 01/25/07 Funds Miller |
"Concentration works when the market has what the academics call fat tails, or in more common parlance, big opportunities. If I am considering buying three $10 stocks, two of which I think are worth $15, and the third worth $50, then I will buy the one worth $50, since my expected return would be diminished by splitting the money among the three. But if I think all are worth $15, then I should buy all three, since my risk is then lowered by spreading it around. For much of the past 25 years, there were those $10 stocks worth $50 around. For the past few years, they have been largely absent, as inter-industry valuations have only been this homogeneous about 2% of the time."
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| The greatest money manager of our time |
| 11/15/06 Miller |
"It goes without saying that Miller is an iconoclast. You simply can't do what he's done in the supremely competitive, ultra-efficient world of stock picking by following the pack. On the outside Miller and his operation look like a standard-issue money management firm - it's a buttoned-down, conservative-looking crew - but spend some time with the man and his brain trust, and you realize that this is more like some sort of academic enclave or wonk house."
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