Bill Miller Loves Mega Caps

We have been tough on Bill Miller around these parts. Investing legends should be held to a higher standard, and the big fella’s performance has not been up to snuff as his fund continues lag behind his peers. The recent ramp in Amazon might have helped his performance, but he is still in the bottom decile over the trailing one and three-year time periods.

Of course, Miller’s broad mandate probably makes lumping him into a rigid stylebox a somewhat useless exercise, at least until they devise one for “common sense”, which he possesses in spades. 

Too, money managers can be a eclectic bunch, and Miller is no exception. His insistence of having younger staffers belong to a book club is one example of his quirkiness:

Q) Is it true you require members of your team to participate in a book club?

A) Yes

Q) What’s the theory behind this requirement?

A) There are important things that we, as investors, need to understand. And it’s valuable to have everyone on the same page by reading the same book, then have authors come in and talk about their ideas. For example, we’ve had Peter Bernstein, who wrote Against the Gods: The Remarkable Story of Risk, come in and talk about notions of risk and return. Kiplinger interview

Miller currently thinks mega-cap stocks are being drastically undervalued vis a vis the smaller S&P 500 names. He also explains his overall investment methodology and articulates the thinking behind his position in Google (GOOG-NASDAQ).

His monster position in Kodak (EK-NYSE) is also discussed. A handful of large institutions own about half of the share count today. I personally find concentrated holder lists a bit dicey. Personnel changes at fund companies can lead to liquidations of positions, and for better or worse Legg and the big holders are married to the stock for now. They had better be right.

His thesis for Mannkind (MNKD-NASDAQ) is far sexier, at least in terms of upside potential.

But you will have to go to Kiplinger to check it out.

A Legend Sizes Up the Market
Kiplinger
--------------------------------------------------------------------------------------------------------------
The content contained represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No position in securities mentioned

Comments:

<< Back to main