|Born:||Laurinburg, North Carolina, in 1950|
|Most Famous For:||Bill Miller is the portfolio manager for the Legg Mason Value Trust (LMVTX) fund, which, under his management, recorded one of the longest "winning streaks" in mutual fund history. Between 1991 and 2005, the fund\'s total return beat the S&P 500 Index for 15 consecutive years.
Miller\'s fund grew from $750 million in 1990 to more than $20 billion in 2006.
Miller graduated from Washington & Lee University in 1972 with a degree in economics. He went to work for the J. E. Baker Co. and became its treasurer. He joined Legg Mason in 1981 and in 2007, was working a chairman and chief investment officer of Legg Mason Capital Management.
He also serves as chairman of the board of trustees of the Santa Fe Institute, a leading center for multidisciplinary research in complex systems theory.
In November of 2006, Fortune Magazine's managing editor, Andy Serwer, characterized Bill Miller's investing style as iconoclastic: "You simply can't do what he's done in the supremely competitive, ultra-efficient world of stock picking by following the pack …The fact is that Miller has spent decades studying freethinking overachievers, and along the way he's become one himself."
Bill Miller is a self-described value investor, but his definition of value investing is somewhat disconcerting to some traditional value investors. Miller believes that any stock can be a value stock if it trades at a discount to its intrinsic value.
Individual investors can learn from Miller's application of this investing principle, which, he says, was the basis for the 15-year benchmark-beating record of the Legg Mason Value Trust fund.
He attributes two factors to this success: exhaustive security analysis and portfolio construction. In his 2006, fourth-quarter letter to the shareholders for Value Trust, Bill Miller explains how these two factors work:
Value investing means really asking what are the best values, and not assuming that because something looks expensive that it is, or assuming that because a stock is down in price and trades at low multiples that it is a bargain … Sometimes growth is cheap and value expensive. . . . The question is not growth or value, but where is the best value … We construct portfolios by using ‘factor diversification.' . . . We own a mix of companies whose fundamental valuation factors differ. We have high P/E and low P/E, high price-to-book and low-price-to-book. Most investors tend to be relatively undiversified with respect to these valuation factors, with traditional value investors clustered in low valuations, and growth investors in high valuations … It was in the mid-1990s that we began to create portfolios that had greater factor diversification, which became our strength …We own low PE and we own high PE, but we own them for the same reason: we think they are mispriced. We differ from many value investors in being willing to analyze stocks that look expensive to see if they really are. Most, in fact, are, but some are not. To the extent we get that right, we will benefit shareholders and clients.
- "The Man Who Beats The S&P: Investing With Bill Miller" by Janet Lowe (2002)
"I often remind our analysts that 100% of the information you have about a company represents the past, and 100% of a stock's valuation depends on the future."
"The market does reflect the available information, as the professors tell us. But just as the funhouse mirrors don't always accurately reflect your weight, the markets don't always accurately reflect that information. Usually they are too pessimistic when it's bad, and too optimistic when it's good."
"What we try to do is take advantage of errors others make, usually because they are too short-term oriented, or they react to dramatic events, or they overestimate the impact of events, and so on."The Greatest Investors: John Neff
InvestingBill Miller is leaving Legg Mason after 35 years and taking the Opportunity Trust fund with him.
InvestingLearn about legendary value investor Bill Miller and discover the five largest holdings in his portfolio.
Financial AdvisorRead about Legg Mason, one of the world's largest asset management firms, and learn more about its multi-manager approach to investment management.
Financial AdvisorDiscover how to diversify retirement savings using two broad-based Legg Mason Funds. Learn about two funds that can significantly increase returns.
InvestingMiller is well-run, but quite small.
InvestingThat didn't take long. After doubt briefly emerged over whether Anheuser-Busch InBev's (NYSE: BUD) revised offer -- altered in response to Brexit -- might doom its chances of completing its ...
InvestingDiscover three Legg Mason mutual funds with long track records. Read a summary of each fund, as well as performance and manager information.
InvestingAccording to mutual fund legend Miller, Amazon could double on the basis of margin expansions in cloud and increased market share of U.S. retail.
Financial AdvisorLearn about the four best mutual funds administered by Legg Mason Inc. that invest in equity and bonds with a wide variety of investment strategies.
InvestingUnderstanding there are concerns that regulators globally will have about its proposed mega merger, Anheuser-Busch InBev (NYSE: BUD) announced it will sell the interests its acquisition target ...