Smooth Sailing for Carl Icahn While Bill Miller Continues to Sink

Do you pity poor Bill Miller? I don't, he had the media fawning over him for many years, and now the worm has turned. But I do feel bad for the shareholders in the Legg Mason Value Trust Mutual Fund (LMVTX), who suffered though another horrible day to day thanks to declines in Freddie Mac (FRE-NYSE) and Merrill Lynch (MER-NYSE).

Miller's fund was down another 78 basis points today, with the S&P 500 up 70 basis points, and Miller is playing right into John Bogle's hands. At this point anyone who invested with Miller after the mid-90's would have been better off in an index fund.

Believe it or not, Yahoo! (YHOO-NYSE) is one of Miller's best stocks year-to-date, at least if you look at his top 25 positions, Two stocks are up, twenty three are down so far this year.. Yahoo! is not exactly a hot stock, but it has outperformed the indices, and Miller will have to take it, its either that or bragging about the YTD performance of IBM. While I have been pointing out his futility for over a year now, the pile on is under way as the main stream media gets on board:

A $10,000 investment in Miller's Legg Mason Value Trust on June 30, 2003, would be worth about $9,800 today, while the same amount placed in an S&P 500 index fund would have climbed to $14,300. Bloomberg

Over the same five-year period, Legg Mason shares have lagged behind the benchmark S&P 500 by 30 percentage points. The shares were hurt last year by withdrawals from equity funds including Miller’s.

Yes, Miller has a boatload of problems, and has been having little or no fun spending weekends on his yacht, which caused quite a stir when he bought it.  He sure could use a shot in the arm about now; and a deal to sell Yahoo! would provide just such a lift.

But Miller has been proven to be penny wise and pound foolish. Quibbling over Yahoo!’s purchase price has hurt Miller’s fund shareholders, and it does not seem to make much sense, particularly his recent demands for $33, or else.

Is it possible Miller is simply jealous of Carl’s boat?  There are many ego’s involved in this soap opera, and little of it makes sense to me. Yacht envy drives billionaires to do strange things; lets face facts.

Carl’s yacht is larger than Bill’s, and he has a blog to boot. If Miller does not get it in gear, he will end up on one of them. And I doubt it will be the yacht.

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cityfile NY has got more pics of the Starfire, check em out. And if you have been short financials, you might even want to rent it out:

Do note that taking a trip aboard the Starfire isn’t cheap. During peak season, a week will cost you $250,000; it’s a relative bargain at $196,000 a week during low season. (Prices and a list of upcoming trips here.) The steep price tag, you’ll be happy to hear, includes the 12-person crew, led by one Carl Sputh, whose motto for yachting is “there are no problems…only solutions.” But you’ll get another 11 people, too, all of whom you can read about in detail here. cityfile NY

A year ago Millers’ Legg Mason value Trust managed approximately $21 billion. After $8 billion in losses, and roughly $4.5 billion in redemptions, Miller his running a little over $9 billion.

Throwing him a life jacket might help, but he will likely be managing less than $8 billion by year-end, market rally or not.
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All Aboard! Where Carl Icahn Stages Deals, Blogs
cityfile NY

Bill Miller Woes in Stocks Spread to Bonds in Slump
Bloomberg
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