Comments on: Bill Miller of Legg Mason Value Trust: Buy Battered Financial & Housing Stocks

By: Anonimous

Anonimous — Wed, 24 Dec 2008 05:38:02 +0000

A year has passed and the results are bad…

By: Kurt Brouwer

Kurt Brouwer — Mon, 17 Dec 2007 21:42:15 +0000

Agreed that Miller has been early in some cases. However, this is not the first time the fund has gone through a situation like this. For example, 1990 was a similar time period in which financials got hit, housing was weak etc. Though he may have been viewed as ‘early’ at that time, the fund also began its 15-year run at that very point.

By: Penelope

Penelope — Mon, 17 Dec 2007 19:48:25 +0000

Miller is much too early with his call on these stocks. They’re a value trap. They look cheap, but the full extent of the damage is still unknown and unfolding. I wonder if his large allocation to these names is a knee-jerk reaction to recent poor performance, hoping to catch a bounce in the stocks. It’s looking more like it may take years for him to just break even on these stocks instead. I agree with your idea to “convene again in a year or so and see how he is doing”. At that time, his long term record may no longer look so stellar…

By: Kurt Brouwer

Kurt Brouwer — Mon, 17 Dec 2007 05:24:51 +0000

Penelope–Yes, I think really bad timing is synonyomous with being wrong. At least, at a given point in time. Any time a portfolio manager buys a stock that goes down considerably, he or she was wrong on the market’s perception of value — over the short run. The question remains though, over what period of time are we measuring? Miller clearly has a superb record, yet he is being tested right now. Let’s convene again in a year or so and see how he is doing.

By: Penelope

Penelope — Sat, 15 Dec 2007 04:55:02 +0000

Following years of outperformance versus the S&P, it’s reversion to the mean time for Bill Miller. Expect continued poor performance as he struggles to grasp why his stock selection is so poor and misguided. CFC is a perfect example of this. It was a top position in the fund at the end of the third quarter as Bill claimed it was cheap and “mispriced”. Since that time, it’s fallen another 48% in value. Other financials have performed similarly and buying hmebuilders now is more of the same folly as they go through long cycles too. Is really bad timing synonymous with being just wrong?