Bill Miller’s Last Stand

StockJockey’s article reminds me of the saying that even a broken clock is right twice a day. – Ilene

Bill Miller’s Last Stand

 Courtesy of StockJockey at 1440 Wall Street

While nearly all of us are walking funny these days, perhaps nobody has fallen further than Legg Mason’s Bill Miller. Speculation is mounting into year end that he might hang it up soon, but he is making trying to make a stand – will it be his last?

Investors might want to note that Bill has been wrong about everything for over a year now. Assets managed in his Value Trust fund are down roughly $18 billion, to $4 billion (LMVTX) and his missteps have been well chronicled. His mid-cap Legg Mason Opportunity fund was recently down 72% year-to-date at its nadir, which would be good by Heiko Thieme’s standards, but is hardly befitting a legend.

But Bill is running out of ammo, and is getting scalped on his latest buys:

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Not Bill

U.S. asset manager Legg Mason Inc’s main Value Trust fund made big changes to its holdings in the third quarter, a regulatory filing on Tuesday showed, but its performance has worsened despite the changes. Reuters

The $7.6 billion fund, run by former star stock picker Bill Miller, exited insurer American International Group ), mortgage lender Freddie Mac and banking firm Goldman Sachs Group (GS in the September quarter, a filing made by the fund with the Securities and Exchange Commission showed.

Value Trust bought a new stake in credit card company American Express Co and stock exchange operator NYSE Euronext in the quarter. The American Express and NYSE Euronext stakes were worth $17.7 million and $79.8 million as of Sept. 30.

The fund also sold its holdings of online travel agency Expedia Inc and phone companies Sprint Nextel Corp and Qwest Communications International in the quarter, the filings showed.

Other securities added to the portfolio in the quarter were software firm Microsoft Corp, corporate storage equipment maker EMC Corp and industrial and consumer goods maker 3M Co it said.

Alas, the changes have not really worked, and fund holders who kept the faith might have to deal with nasty tax distributions at year end, as the years final gift from Bill shows up in their mailbox.

Of course, check with the guys in Baltimore to see if this is indeed the case on the tax distribution. It seems plausible; I believe I read it somewhere a few weeks back.

But trust me on one thing…this has been a massacre.

Bill will eventually be right….sooner or later. But by calling on the government to buy stocks, he has clearly lost his mind.

Miller, speaking at an investor conference in New York, called the U.S. government’s rescue last month of Citigroup Inc. a “very good policy” that should be applied to other companies. The U.S. agreed to protect $306 billion of the New York-based bank’s loans and securities. In exchange, Citigroup will provide preferred shares to the U.S. Treasury and the Federal Deposit Insurance Corp. Bloomberg

“The Fed should be buying everything in sight,” Miller, 58, said. “The taxpayer would make a killing.”

C’mon Bill. Just go quietly.
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Spring 2008

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Legg’s main fund reshuffled picks, but returns dip
Reuters

Legg Mason’s Miller Says Fed Should Buy More Stocks
Bloomberg

Previously
Bill Miller’s Second Quarter Commentary Is a Big Joke
1440 Wall Street

Legg Mason: Breakdown in Baltimore
1440 Wall Street

Bill Miller’s Fireside Chat with Morningstar
1440 Wall Street