Jump to content

What do you guys think of Bill Miller?


Guest valueInv
 Share

Recommended Posts

Guest valueInv

I heard his interview on Wealthtrack and was impressed. I don't hear much about him in value circles tough.

I understand that he made some big mistakes with financials around 2008 but other than that seems to have

an incredible track record.

Link to comment
Share on other sites

Last I checked on him, he made a fortune in the 90's by betting on AOL & DELL.  Betting on them and holding.  However I remember reading that in the last decade he gave up all of the overperformance.  Basically there is no statistical proof, that I'm aware of, that he's superior.

 

You just like him because he's buying Apple.

Link to comment
Share on other sites

I heard his interview on Wealthtrack and was impressed. I don't hear much about him in value circles tough.

I understand that he made some big mistakes with financials around 2008 but other than that seems to have

an incredible track record.

 

Smart guy, a few bad decisions.  You are only as good as your last game in this business, so he was a hero for 16 years, and then a zero for four more years.  I'm not sure public perception means anything, and investors can still learn from him...both successes and failures.  Cheers!

Link to comment
Share on other sites

I heard his interview on Wealthtrack and was impressed. I don't hear much about him in value circles tough.

I understand that he made some big mistakes with financials around 2008 but other than that seems to have

an incredible track record.

 

Bill Miller had $200 million of Bear Sterns. He gave a short talk the morning of March 14, 2008 explaining why Bear Sterns was a good investment. As he was talking Bear Sterns was crashing.

Link to comment
Share on other sites

I heard his interview on Wealthtrack and was impressed. I don't hear much about him in value circles tough.

I understand that he made some big mistakes with financials around 2008 but other than that seems to have

an incredible track record.

 

Bill Miller had $200 million of Bear Sterns. He gave a short talk the morning of March 14, 2008 explaining why Bear Sterns was a good investment. As he was talking Bear Sterns was crashing.

 

LOL!  Yeah, I remember that.  Alot of things were crashing, while alot of people were talking in 2008, though.  He's long Groupon, so let's see if that was a canary in the coal mine in a year or two.  Cheers!

Link to comment
Share on other sites

I heard his interview on Wealthtrack and was impressed. I don't hear much about him in value circles tough.

I understand that he made some big mistakes with financials around 2008 but other than that seems to have

an incredible track record.

 

Bill Miller had $200 million of Bear Sterns. He gave a short talk the morning of March 14, 2008 explaining why Bear Sterns was a good investment. As he was talking Bear Sterns was crashing.

 

LOL!  Yeah, I remember that.  Alot of things were crashing, while alot of people were talking in 2008, though.  He's long Groupon, so let's see if that was a canary in the coal mine in a year or two.  Cheers!

 

Yes a lot of people were talking the line Bill Miller was. Just a few weren't. Steve Eisman spoke right after Miller. The title of his talk was "This Time is Different" and he talked about the greatest deleveraging in history was about to happen. Eisman made a lot of money the next few days.

Link to comment
Share on other sites

Guest valueInv

I heard his interview on Wealthtrack and was impressed. I don't hear much about him in value circles tough.

I understand that he made some big mistakes with financials around 2008 but other than that seems to have

an incredible track record.

 

Bill Miller had $200 million of Bear Sterns. He gave a short talk the morning of March 14, 2008 explaining why Bear Sterns was a good investment. As he was talking Bear Sterns was crashing.

 

LOL!  Yeah, I remember that.  Alot of things were crashing, while alot of people were talking in 2008, though.  He's long Groupon, so let's see if that was a canary in the coal mine in a year or two.  Cheers!

Even more interesting is his bet on airlines.

 

His fund is very expensive.

Link to comment
Share on other sites

Guest valueInv

I heard his interview on Wealthtrack and was impressed. I don't hear much about him in value circles tough.

I understand that he made some big mistakes with financials around 2008 but other than that seems to have

an incredible track record.

 

Smart guy, a few bad decisions.  You are only as good as your last game in this business, so he was a hero for 16 years, and then a zero for four more years.  I'm not sure public perception means anything, and investors can still learn from him...both successes and failures.  Cheers!

 

I'm sure the herd judges him that way. But a few bad decisions does not mean a bad investor going forward. In fact, a smart guy won't repeat them.

Link to comment
Share on other sites

I heard his interview on Wealthtrack and was impressed. I don't hear much about him in value circles tough.

I understand that he made some big mistakes with financials around 2008 but other than that seems to have

an incredible track record.

 

Bill Miller had $200 million of Bear Sterns. He gave a short talk the morning of March 14, 2008 explaining why Bear Sterns was a good investment. As he was talking Bear Sterns was crashing.

 

LOL!  Yeah, I remember that.  Alot of things were crashing, while alot of people were talking in 2008, though.  He's long Groupon, so let's see if that was a canary in the coal mine in a year or two.  Cheers!

 

Groupon has no long term debt and cant even be compared to bear sterns. If you think groupon dies in a year or two this wont look good for overstock either. 

Link to comment
Share on other sites

Miller seems to have lacked an understanding of capital preservation.  It is interesting that Buffett has never made this mistake on a large scale. 

 

There is alot to be said about avoiding mistakes as part of an overall long term success strategy.  Bill Miller failed at this.  As a result his long term record got slaughtered.

 

Buffet and Munger have stated that avoiding mistakes has been an integral part of their long term success.  Buffett published his requirements for a successor, and one of them was to be able to manage risk, even where is was not easily predictable.

 

 

 

 

Link to comment
Share on other sites

I used to keep an eye on him a few years back ( in 2001-2003 time frame) and from what I learned he is extremely obsessed with beating the S&P 500 more than anything. He would keep track hour by hour his relative performance. He would much rather prefer a 50% loss if S&P 500 loses more than 50% than a large gain that under performs the index. He is more of a contrarian investor rather than a margin of safety kind of investor. I realized pretty quickly he is not someone worth keeping track of and kind of lost track of him after that.

 

Vinod

Link to comment
Share on other sites

Perhaps I'm wrong, but I think a lot of success is based on a certain level of arrogance (or well, a lack there of). Miller beat the S&P 500 like 15,16 years in a row. I'm guessing he probably had a nice ego after that. Hubris can cause a big, big downfall. I think when Buffett makes big bets, he knows what he doesn't know. I think so many of us think we know more than we do.

 

As Mark Twain once wrote:

 

"It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.""

Link to comment
Share on other sites

Miller seems to have lacked an understanding of capital preservation.  It is interesting that Buffett has never made this mistake on a large scale. 

 

There is alot to be said about avoiding mistakes as part of an overall long term success strategy.  Bill Miller failed at this.  As a result his long term record got slaughtered.

 

Buffet and Munger have stated that avoiding mistakes has been an integral part of their long term success.  Buffett published his requirements for a successor, and one of them was to be able to manage risk, even where is was not easily predictable.

 

As Charles Ellis has pointed out, investing is a "loser's" game. His analogy it to tennis. The one who wins the tennis match is not the one who hits the most winning shots, but the one who hits the fewest losing shots.

Link to comment
Share on other sites

Bill miller talks about value investment but his actions were far from it even when he made money.

 

How so?

 

Some of his tech investments didn't have enough intrinsic value for the price he paid or at specific price he was holding them. Now about making money in them, yaah almost every dart thrower was making money in tech stocks. Not saying that he was a dart thrower but putting his performance in perspective when it comes to tech stocks. Also as some one else pointed out, the absence of downside analysis. After analyzing his past investments, I won't spend even 5 seconds thinking about his buys/sells.

 

He used to talk a lot about applying Buffett's logic in tech stocks and he did make some money but his logic was far from how WB thinks. Talking Buffett's logic was easy part but he was hardly following it.

Link to comment
Share on other sites

I heard his interview on Wealthtrack and was impressed. I don't hear much about him in value circles tough.

I understand that he made some big mistakes with financials around 2008 but other than that seems to have

an incredible track record.

 

Bill Miller had $200 million of Bear Sterns. He gave a short talk the morning of March 14, 2008 explaining why Bear Sterns was a good investment. As he was talking Bear Sterns was crashing.

 

LOL!  Yeah, I remember that.  Alot of things were crashing, while alot of people were talking in 2008, though.  He's long Groupon, so let's see if that was a canary in the coal mine in a year or two.  Cheers!

 

Groupon has no long term debt and cant even be compared to bear sterns. If you think groupon dies in a year or two this wont look good for overstock either.

 

Did I say that Groupon dies in a year or two?  It was a sarcastic comment about the Bear Stearns interview he did, just like right now he recently said he was long Groupon.  Cheers!

Link to comment
Share on other sites

Bill Miller has lost his investor's money in absolute terms in his investment career, but made himself fabulously rich. A chain is just as strong as its weakest link. Bill Miller may be smart in some ways, but he has a weak link in his mental model.

For mutual fund, it has small AUM when it goes up and it has largest AUM when it is ready to fall. Although Miller beat S&P 500 15 years in a row, he build his reputation gradually and AUM increases gradually. His AUM reaches the highest just when he had the disaster performance. His fund had more than $20 billion under management at the peak. He lost 58% of the money in 2008. After losses and redemptions, only $4.3 billion was left. He wiped out all the money he has made over his career in a single year and some.

However, he has made a lot of money during the process. His fund charges like 2% of AUM, the highest in mutual funds. Although he lost like $10 billion in 2008, he still charges 2% fee and he kept all the fees he has made over the years. In 2006, he bought a 235-foot yacht, "Utopia."

'What matters is how much you make when you're right. If you're wrong nine times out of 10 and your stocks go to zero -- but the tenth one goes up 20 times -- you'll be just fine.” –Bill Miller.

Is he a gambler or what? If you are a gambler, you will suffer a gambler’s feat sooner or later, no matter how much you have won. In Miller’s case, he has won 15 year of beating S&P 500.

 

 

I heard his interview on Wealthtrack and was impressed. I don't hear much about him in value circles tough.

I understand that he made some big mistakes with financials around 2008 but other than that seems to have

an incredible track record.

Link to comment
Share on other sites

Guest valueInv

His horrendous performance in 2007 and 2008 killed his long term track record. He's underperfomed the S&P 500 since inception by about 10% (though since he left the fund like a year ago or whatever performance has gotten better.

 

http://quotes.morningstar.com/fund/f?t=LMVTX&region=USA&culture=en-US

 

Which fund does he actually run now? From the link you posted, his biggest S&P beats seem to some in the late 90s. Was he a big tech guy?

Link to comment
Share on other sites

Guest valueInv

Miller seems to have lacked an understanding of capital preservation.  It is interesting that Buffett has never made this mistake on a large scale. 

 

There is alot to be said about avoiding mistakes as part of an overall long term success strategy.  Bill Miller failed at this.  As a result his long term record got slaughtered.

 

Buffet and Munger have stated that avoiding mistakes has been an integral part of their long term success.  Buffett published his requirements for a successor, and one of them was to be able to manage risk, even where is was not easily predictable.

 

His big drop seems to be the 2008 crisis and my understanding is that he was big into financial stocks at that time. But weren't many other value investors hit in the same way. From what I gather, people (Miller and other value investors) didn't anticipate liquidity risks which ultimately killed companies like Bear Sterns and took funds like Miller's down. Was he different from other value funds in that regard?

 

Link to comment
Share on other sites

His horrendous performance in 2007 and 2008 killed his long term track record. He's underperfomed the S&P 500 since inception by about 10% (though since he left the fund like a year ago or whatever performance has gotten better.

 

http://quotes.morningstar.com/fund/f?t=LMVTX&region=USA&culture=en-US

 

Which fund does he actually run now? From the link you posted, his biggest S&P beats seem to some in the late 90s. Was he a big tech guy?

 

He manages Legg Mason Capital Management Opportunity Trust (LMOPX) now. With regards to tech stocks, I am pretty sure he owned AOL, Amazon and Dell probably others. He also owned Enron and WolrdCom.

 

Link to comment
Share on other sites

Miller seems to have lacked an understanding of capital preservation.  It is interesting that Buffett has never made this mistake on a large scale. 

 

There is alot to be said about avoiding mistakes as part of an overall long term success strategy.  Bill Miller failed at this.  As a result his long term record got slaughtered.

 

Buffet and Munger have stated that avoiding mistakes has been an integral part of their long term success.  Buffett published his requirements for a successor, and one of them was to be able to manage risk, even where is was not easily predictable.

 

His big drop seems to be the 2008 crisis and my understanding is that he was big into financial stocks at that time. But weren't many other value investors hit in the same way. From what I gather, people (Miller and other value investors) didn't anticipate liquidity risks which ultimately killed companies like Bear Sterns and took funds like Miller's down. Was he different from other value funds in that regard?

 

I think Uccmal is referring to the fact the Wechler and Combs made it through the crisis without getting killed and that was highlighted when Buffet hired them as examples of the type of people BRK wanted to hire. Hence there are other people available to watch or follow who have records of capital preservation. They were managing partnerships/hedge funds though not mutual funds.

 

Not sure which value mutual fund managers made it through the crisis without getting killed. Berkowitz was %30 down in 2008 but from what I remember he was not holding any of financials that got creamed. I think he really started getting into AIG and BAC in 2010.

Link to comment
Share on other sites

Miller seems to have lacked an understanding of capital preservation. 

 

I remember reading an interview with him where he was asked how he knew when he was wrong. His answer (paraphrasing): When I can no longer get a quote.

 

That did it for me.

 

FWIW, I've felt that Seth Klarman's barbs at "value pretenders" in his Margin of Safety was directed, amongst others, at Bill Miller.

 

Best,

Ragu

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...