finding the greater fool: Bill Miller, Bill Miller's investors or the guys who write about them

David_Snowball

By squinting carefully, a writer for the WSJ was able to conclude that Bill Miller's Legg Mason Value Trust had the best performance of any fund for the 15 years before the market's crash and the fund's ultra-crash. The fund flopped around like a fish tossed on the pier, investors left, Miller left, and the fund was rechristened. Now, because Miller is more talented and sees more deeply than any other, his Legg Mason Opportunity fund has the best record of any comparable fund over the past several years. That's the story told in "Mutual-Fund King Bill Miller Makes a Comeback." (Note: not my hyphen.)

Josh Brown's dissection of the article and Mr. Miller's performance, "Here's Everything That's Wrong With Investor Behavior, In One Article" is thoughtful, wry and corrosively critical. You might enjoy it.

David

Old_Joe

Beware of hyperventilation over over-hyphenation!

Add: That's a great article! Thanks. (You really are a lot better than Ted!)

scott

"Since the horrible losing streak, Mr. Miller has read a pile of books and research papers about crises in hopes of getting a better grip on what happened."

LMAO. That's hysterical. Maybe not being a robotic bull cheerleader might help. Of course, all these managers who got obliterated in 2008 go, "Whocouldaknown?"

Josh Brown's terrific, really best thing about CNBC at this point. I just wish there was something besides CNBC where Brown could say something like he does in the article. If Brown actually said anything on CNBC like the above linked article, they'd probably quickly go to one of those "We're Having Technical Difficulties" screens.

From the article: "There’s very little downside for everyone involved. Except the investors."

That's what I feel like on CNBC, as well. "Gosh, don't question anyone!" Gartman can have a terrible ETF that closed, another two or three that closed (although I think those were just lack of interest) and no one ever even dares ask about it. No one even really tries to debate someone or question someone on CNBC unless it's some silly game-like thing.

There's been times where Gartman has been on Fast Money talking some nonsense about how he's "Long gold in Yen" or some other ridiculous trade that will likely reverse shortly and you see the traders looking like they want to say something but can't. Miller did terribly during the crisis and after and people throw money at him again until next time is robotic auto-bullishness gets his investors in trouble.

"In The Big Short, author Michael Lewis recounts a similar episode. On a Friday morning in March 2008, Miller was invited to present the bullish case for investment bank Bear Stearns, which had traded at $53 the previous day. During a Q&A session after his presentation, an audience member asked Miller a question: "Mr. Miller, from the time you started talking, Bear Stearns stock has fallen more than 20 points. Would you buy more now?" Miller's answer: "Yeah, sure, I'd buy more."

By the following Monday, Bear Stearns had been sold to J.P. Morgan for $2 a share."
http://www.cbsnews.com/news/bill-miller-large-cap-stocks-represent-a-once-in-a-lifetime-opportunity/

Would love to see Josh Brown on a show with former CNBCer Jeff Macke.

David_Snowball

Thank you, sir. Ted's greatest strength is his utter commitment to the enterprise. I'm on break, the baseball schedule is light and the worst of the flood of workmen has passed, so I've got time - in Ted's absence - to share a few articles in the morning. When life gets busy, I'll need to back off. He's managed the feat, almost daily, for 20 years.

Perhaps different but complementary ways of supporting the enterprise?

David

VintageFreak

Bill Miller is NOT the fool. Something else, not fool. Everyone else is a fool, some multiple times over.

rjb112

David_Snowball said:

By squinting carefully, a writer for the WSJ was able to conclude that Bill Miller's Legg Mason Value Trust had the best performance of any fund for the 15 years before the market's crash and the fund's ultra-crash. The fund flopped around like a fish tossed on the pier, investors left, Miller left, and the fund was rechristened. Now, because Miller is more talented and sees more deeply than any other, his Legg Mason Opportunity fund has the best record of any comparable fund over the past several years. That's the story told in "Mutual-Fund King Bill Miller Makes a Comeback." (Note: not my hyphen.)
David

I don't have access to this WSJ article using the above link.
Does someone have another link? Or can someone copy/paste?

rjb112

Josh Brown makes an error in his article, and I just sent him an email explaining it.
In his article he states:

"The Morningstar analyst quoted neglects to mention that her firm’s backward-looking rating on the Value Trust at the time was undoubtedly “Five Stars”."

Doesn't look like Josh Brown understands the Morningstar ratings. Don't get me wrong, I like Josh Brown a lot.....one of the "good guys" out there.

Here's what I just emailed him:

"Josh, the star rating is not Morningstar's opinion of the fund. It is simply math.....the performance. No judgment at all, just math.

Morningstar's opinion of the fund is called their Analyst Rating, and it's their personal opinion/judgment of the fund, of which performance is only one component. The Analyst rating can be Gold, Silver, Bronze, Neutral, or Negative. It looks at their "P's"---People, Parent, Process, Price [expense ratio], and Performance. Currently their Analyst rating is Neutral.

I have the Morningstar documents detailing their methodology for the Analyst rating and for the star rating, and I am happy to send them to you on PDF if you wish."

David_Snowball

On the Wall Street Journal articles: try Googling the article title. Often the Google link works fine but my attempt to republish the link fails miserably.

David

scott

rjb112 said:

Josh Brown makes an error in his article, and I just sent him an email explaining it.
In his article he states:

"The Morningstar analyst quoted neglects to mention that her firm’s backward-looking rating on the Value Trust at the time was undoubtedly “Five Stars”."

I think it intended as a bit of exaggeration.

rjb112

David_Snowball said:

On the Wall Street Journal articles: try Googling the article title. Often the Google link works fine but my attempt to republish the link fails miserably.

David

Yeah, I always use that 'technique'......googling the article's title, and it usually works. Sometimes I have to try several different links from google.
This time was odd: I tried to access the article several times by using a google link, and was blocked each time. Just now I tried the same exact google link and was successful. Got in.

Here's the link that got me in.

http://online.wsj.com/articles/mutual-fund-king-bill-miller-makes-comeback-1404095931

However, I just tried this link again as an experiment....and it blocks me again!

davidrmoran

change browsers, and/or open anon/incog/private session; sometimes that works (it's all tracked via cookies, of course)

rjb112

davidrmoran said:

change browsers, and/or open anon/incog/private session; sometimes that works (it's all tracked via cookies, of course)

@davidmoran: I did change browsers, from IE to Chrome, and that didn't allow access. What is the "open anon/incog/private session" all about?

davidrmoran

Well, try Firefox.

Each of the big three Win browsers offers a clean launch without cookies or memory; if you cannot grok it on your own, just google or try this: Chrome = Ctrl + shift + N, FF = the same only + P, IE = File, New Session.

rjb112

I tried viewing it "incognido" (in both Chrome and IE), but WSJ still wouldn't show it!!



But it's OK. The one time it did let me in was enough. Surprised I even got in that one time.

rjb112

By the way, thank you Google that my browsing using Chrome is not hidden from my employer, my internet service provider, or my government. I don't think any of them care that I was trying to view an article from the WSJ, but frankly it is none of their business

davidrmoran

No one says it works all the time or is foolproof. Like investing, ymmv.

As for history tracking, oh yeah, no frankly to it, it is their business, what you do at work. Come on.

rjb112

I'm not talking about my employer. That's a different issue, since they are paying you for your time, it is their computer and connection, etc.

But on my own at home? No, I don't believe that the government, the internet service provider or anyone else should know where I am going on the internet. And I also don't believe that foreign governments should have the right to know where their citizens are going on the internet either.

davidrmoran

Now that would make it much harder to track terrorists, saboteurs, pedophiles, and evildoer hacker thieves.