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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Zero Hedge

Renewables Not So Reliable As US Hydropower Plunges 14%

Courtesy of ZeroHedge View original post here.

The transition away from hydrocarbons is not a seamless as many hope. The latest data from the Energy Information Administration (EIA) shows a significant decline this year in hydropower generation amid historic droughts. 

The magical thinking about renewable energy and President Biden's calls for the U.S. power grid to be 100% clean by 2035 is a pipe dream. 

...

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Phil's Favorites

Facebook Inc. New Employee Manual

 

Facebook Inc. New Employee Manual

Courtesy of Scott Galloway, No Mercy/No Malice@profgalloway

I wrote this two and a half years ago, and believe it still lands.

[The following was originally published on May 31, 2019.]

Sociobook

There’s a firm that’s grown faster than any firm to date. Its founder also set the DNA of the firm, but without the benefit of the modulation and self-awareness that come with age. It’s in a sector where network effects created a handful ...



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Digital Currencies

China Declares All Virtual Currency Transactions "Illegal", Sending Crypto Prices Tumbling

Courtesy of ZeroHedge

China expanded its escalating crackdown on cryptocurrencies on Friday when its central bank declared that all activities related to digital coins are “illegal” and must be banned.

In a statement dated Sept. 15 but was only posted onto the central bank’s website at 5 p.m. local time on Friday, the People’s Bank of China said the latest notice was to further prevent the risks surrounding crypto trading and to maintain national security and social stability.

Naming bitcoin, ether and tether as examples, the centra...



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Politics

'What Betrayal Looks Like': UN Report Says World on Track for 2.7°C of Warming by 2100

 

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Image by Gerd Altmann from Pixabay

'What Betrayal Looks Like': UN Report Says World on Track for 2.7°C of Warming by 2100

"Whatever our so-called 'leaders' are doing," said Swedish climate activist Greta Thunberg, "they are doing it wrong."

By Jake Johnson, Common Dreams

The United Nations warned Friday ...



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Biotech/COVID-19

FDA panel recommends limiting Pfizer booster shots to Americans 65 and older, and those at high risk of severe COVID-19

 

FDA panel recommends limiting Pfizer booster shots to Americans 65 and older, and those at high risk of severe COVID-19

No third dose for now. AP Photo/Robert F. Bukaty

Courtesy of Matthew Woodruff, Emory University

The key scientific advisory council of the Food and Drug Administration has voted to deny authorization of...



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Chart School

Gold and Silver Volume Waves Review

Courtesy of Read the Ticker

The sign says it all. The professionals want the public to focus on the words, to scare out the weak hands, but the color of the sign underlines the value in a money printing world, its gold stupid.

Point and figure (PnF) charts draw price waves with the sum of volume per wave. PnF charts high light true accumulation underneath price action. This is why Richard Wyckoff favored PnF charts.    

In the charts below we see price moving sideways to down, yet volume on up waves are greater than volume on down waves. At the moment there is no heavy selling on down waves. Or in other words price is being moved down at a low volume expense to allow accumulation at a lower price.

This action represents professionals building their...

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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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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