Comments on: Poor Bill Miller…

By: Troy

Troy — Tue, 16 Dec 2008 04:52:33 +0000

“tried to beat the system”

That is why it is called “the system”

Over time it will beat you.

Wise ones learn how to respect the system, not beat it.

Its like trying to beat mother nature. Learn to respect it, not beat it.

By: Bill M

Bill M — Sun, 14 Dec 2008 15:16:00 +0000

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” – Warren Buffet

I guess Mr. Oracle of Omaha is correct.

By: DoubleOurMoney

DoubleOurMoney — Sat, 13 Dec 2008 20:20:10 +0000

Bill Miller’s outstanding reputation was tarnished dramatically by one bad year. Arrogance may have come before due dilligence as Miller invested in the losers that have tarnished his reputation.

However, a humbled Miller will bring stellar returns again unless he is shown the door. Miller is too good a money manager to not learn from his mistakes.

By: David

David — Sat, 13 Dec 2008 10:31:59 +0000

Just goes to show that you can only beat the system for so long.

If this isn’t a perfect argument for index funds, I don’t know what is.

By: Mark

Mark — Fri, 12 Dec 2008 16:57:07 +0000

I owned the Legg Mason Value Trust in the early 2000′s and the returns were good. I think that as the fund became too big that it became more difficult for Miller to beat the S&P 500. This probably led to him taking larger gambles which came back to bite him.

By: Tim

Tim — Fri, 12 Dec 2008 12:41:30 +0000

@Jeff, i think it is deer in the headlights and can’t do wrong syndrome. the danger sign is not rebalancing a portfolio when it starts to get overweight in any given sector or stock. i will definitely be more conscious of this in the future, given that i own dodge and cox stock fund, which had the same problem to a lesser extent by allowing aig and fannie to gain increased portfolio share in the fund.

By: Ski Snowboarder

Ski Snowboarder — Fri, 12 Dec 2008 01:49:07 +0000

I had LMVT for years (around 1994 to 2003). I think it was at that point they started to impose numerous fees on my account and I decided it wasn’t worth it.

I’d like to say that I was psychic, but I just got lucky it seems.

By: Jeff Snell

Jeff Snell — Fri, 12 Dec 2008 00:04:39 +0000

Eric, I agree what a bummer for those folks who based their investments on a long term run like Bill’s had.

I have this theory that every investor will blow himself up if he plays the game long enough. Watching what happened here is a little more evidence of that. I don’t know whether they lose their “humility” or what, but it’s not pretty when it happens. Think Livermore, Gann, Durant, etc.

Is it possible that Miller, Gross and Buffett might be their modern counterparts? Food for thought.

By: Tim

Tim — Thu, 11 Dec 2008 23:47:49 +0000

this is a prime example of how hubris gets in the way of basic fund strategies. miller should have been reducing holdings in aig, freddie, etc to rebalance the portfolio. as the chart indicates, your wings melt as you soar to high to the sun. hubris sucks.

By: Eric Toya - Trovena Blog

Eric Toya - Trovena Blog — Thu, 11 Dec 2008 21:40:45 +0000

What is shocking is that 15 years of consecutive index beating was wiped out in three years, and really in one year. While the lines on the graph appear to be equal at this point, how about the millions of investors who invested their money in Miller’s fund only recently, after seeing his “impressive” run of beating the index?