Posts Tagged ‘Bill Miller’

THE MUTUAL FUND INDUSTRY – INVESTORS DESERVE BETTER

Interesting look under the hood of Mutual Funds, by The Pragmatic Capitalist - Ilene

MUST READ: THE MUTUAL FUND INDUSTRY – INVESTORS DESERVE BETTER

I was shocked to see the front page of Barron’s with the image of investing legend Bill Miller titled “He’s Back!  -  It’s Miller Time”.   The article says Miller is back at the top of his game after a disastrous 2 year run.   A closer look at Miller’s fund and the mutual fund industry actually shows a pervasive and destructive problem on Wall Street -a total and complete lack of risk management.

The Barrons interview claims that Miller’s fund is worth taking a look at again.  Miller himself even says that his patient investors have been rewarded:

“The shareholders who stuck with us believed in our process and have seen us underperform; it has happened before,” Miller told Barron’s in a recent interview. At least “we built up large tax-loss carry forwards, which will mean no capital-gains taxes, which may go up.”

In 2007 Miller lost 6.7% and then lost an astounding 55% in 2008.  His fund is up over 36% this year.  $100,000 invested with Miller over the last two years would leave you with roughly $60,000 today.  Glad you stuck with Miller?  Miller goes on to claim that his performance this year is due to superb risk management:

But this time was different. “This turned out to be a collateral-driven crisis caused by underperforming debt,” also known as toxic assets, Miller says. “We’ve analyzed that mistake and tried to make adjustments to risk management and the portfolio-construction process.”

Risk management?  Hardly.  Read on….Bill Miller is infamous for supposedly outperforming the S&P 500 for 15 straight years.  He has made hundreds of millions of dollars due to this performance and essentially built the Legg Mason brand by himself.  But a look under the hood shows a massive Wall Street problem.   See, Miller is a part of an industry that has been proven to underperform a standard index fund (more than a handful of studies show that over 80% of all mutual funds underperform a comparable apples to apples index).

What mutual funds like Miller’s do is this: they come up with fancy sounding names that give investors the impression they are investing in one thing when in fact they are investing in an index fund clone –…
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DID TRADERS KILL VALUE INVESTING?

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DID TRADERS KILL VALUE INVESTING?

Courtesy of The Pragmatic Capitalist

The “Writing on the Wall” piece in today’s WSJ concludes that traders killed value investing.  The author, David Weidner, implies that hedge funds and computerized trading have changed the game from what was once a long-term game to a short-term game. Mr. Weidner says:

Today, a hedge fund investing billions using a quantitative formula can stall a stock; a couple hedge funds aligned can turn a profitable company into a Dow laggard. Toss in a few short sellers and you have the great Wall Street collapse of September 2008.

It wasn’t always this way. Before the machines and the shorts took over Wall Street, stocks were evaluated by an underlying company’s prospects. Buy-and-hold investing ruled the day. Investors such as Warren Buffett and Bill Miller were the models.

Curious choice of “models”.  Regular readers know that I have debunked the Bill Miller myth.  He can’t create alpha to save his life.  He’s been nothing but a value fund manager on beta steroids for years and his risk adjusted returns prove it.  As for Buffett – he’s a more complex outlier.  While Buffett has sold the “value” approach hook line and sinker a look under the hood proves that Buffett does a lot more than value investing.  What Mr. Weidner fails to note in his article is that Buffett started as a hedge fund – Buffett Partners.  He used the fund to buy Berkshire and then essentially became the first ever activist investor.  Buffett likes for you to think that he just reads balance sheets all day and let’s everyone else manage his $150B empire, but that’s just not accurate.   Buffett scrutinizes every aspect of a deal in the same way that a private equity fund or hedge fund would.  He sells this folksy next door persona, but Buffett is far more complex than he leads on.  Although most of Buffett’s long-term returns came from a few names (Coke, Geicco) he is actually more active than many think.  His derivatives and currency trades over the years are far from “value investing” and his entire insurance business is more like an option writing strategy than


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Phil's Favorites

Is This As Good As It Gets For the Stock Market?

 

Is This As Good As It Gets For the Stock Market?

Courtesy of 

Josh and I spoke recently  about the slow grind higher, the lack of volatility, and all the recent stock market records. The very first response in the comment section was, “market overdue for a pullback.”

This seems to be the prevailing narrative and I gotta be honest, I agree. I’m just as surprised as anyone that the market keeps grinding higher.

Here are a few data points, by way of the S&am...



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Zero Hedge

Neel Kashkari Appeals To "QE Conspiracists": Show Me How The Fed Is Moving Stock Prices... So Here It Is

Courtesy of ZeroHedge View original post here.

Things are starting to get surprisingly heated at the Fed, now that not only Wall Street strategists, and traders but also Fed presidents are starting to tell the truth about how the Fed's "NOT QE", which sorry but we will call it by its real name QE 4, is pus...



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The Technical Traders

Energy Continues Basing Setup - Breakout Expected Near January 24th

Courtesy of Technical Traders

After watching Crude Oil fall from the $65
ppb level to the $58 ppb level (-10.7%) over the past few weeks, we still
believe the energy sector is setting up for another great trade for skilled
investors/traders.

We are all keenly aware that Winter is still
here and that heating oil demands may continue to push certain energy prices
higher.  Yet Winter is also a time when
people don’t travel as much and, overall, energy prices tend to weaken
throughout Winter.

Over the past 37 years, the historical monthly breakdown for Crude Oil is as follows:

December: Generally l...



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Insider Scoop

10 Biggest Price Target Changes For Friday

Courtesy of Benzinga

  • Citigroup lifted Caterpillar Inc. (NYSE: CAT) price target from $145 to $170. Caterpillar closed at $147.87 on Thursday.
  • UBS cut Twitter Inc (NYSE: TWTR) price target from $37 to $35. Twitter shares closed at $34.19 on Thursday.
  • Morgan Stanley boosted the price target for Yum! Brands, Inc. (NYSE: YUM) from $113 to $118. Yum! Brands closed at $102.16 on Thursday.
  • Jefferies lifted the price target on Ventas, Inc. (NYSE: ...


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Kimble Charting Solutions

Tesla About To Run Out Of Energy Here? Short-Term Peak Possible?

Courtesy of Chris Kimble

Tesla (TSLA) has been screaming higher of late, as very impressive gains have taken place.

Is Tesla about to run out of energy/take a break/experience some selling pressure? A unique price setup is in play, that bulls might want want to be aware of.

This chart applies Fibonacci to the 2016 lows and 2017 highs at each (1). The impressive rally of late has it testing its 161% extension level, based upon those price points.

At the same time, it is hitting its 161% extension level, it finds itself at the top of a 7-year rising channel, with momentum hitting the highest ...



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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker

The new year of 2020 has gold is poised to break out higher. Why is gold going higher? Maybe the FED's economists can explain .... or not.

Maybe these could be on the list:

- FED repo hundreds of billions a day.
- ECB made up tools to keep the European banks solvent.
- A sugar high stock market with Apple Inc and Microsoft looking like Bitcoin 2017.
- The US bond market is NOT confirming a strong stock market.
- Corporate profits have flat lined for 3 years while stocks soared each year.
- Knowing an US election year needs stimulus, and a lower US dollar is a first choice.
- China deal, will have a currency element to make it easier to do business. Lower US dollar.



Gold Gann Angle ...

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Digital Currencies

Cryptos Have Surged Since Soleimani Death, Bitcoin Tops $8,000

Courtesy of ZeroHedge View original post here.

Bitcoin is up over 15% since the assassination of Iran General Soleimani...

Source: Bloomberg

...topping $8,000 for the first time since before Thanksgiving...

Source: Bloomberg

Testing its key 100-day moving-average for the first time since October...

...



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Members' Corner

Tobin Smith: Foxocracy, the 2020 Election, and the Stock Market

 

For decades, Fox News has been spreading false information and hooking its audience into an angry, xenophobic and paranoid worldview. It's no mystery that Fox was instrumental in the 2016 election -- but how did it do it? How did it gain so much influence? Tobin Smith, CEO of Transformity Research, Inc. and former Fox News contributor and talk show host, explores this phenomenon and discusses Fox News’ emotionally predatory and partisan propaganda media strategies and tactics in his new book, ...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

Reminder: We are available to chat with Members, comments are found below each post.

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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