Time Value of Money
Kinds of Interest Rates
Future Value of an Uneven Cash flow
Security Market Line
Cost of Capital
The Balance Sheet
Hall of Fame
Bill Miller was born in 1950 in Laurinburg, North Carolina. He attended Washington & Lee University and graduated in 1972 with an economics degree. After graduating, Miller got a job at the J.E. Baker Co and moved on to become its treasurer. In 1981 he went to work for Legg Mason and in 2007 he held the positions of chief investment officer and chairman at Legg Mason Capital Management. He also manages the portfolio of the Legg Mason Value Trust (LMVTX). Miller has achieved excellent results managing this fund. From 1991 until 2005 the total return earned by the fund consistently outperformed the S&P 500 index. In 1990 the fund was valued at $750 million and in 2006 it had grown to $20 billion.
Miller’s investment style has been described as iconoclastic. The managing editor of Fortune Magazine, Andy Serwer, said "You simply can't do what he's done in the supremely competitive, ultra-efficient world of stock picking by following the pack …The fact is that Miller has spent decades studying freethinking overachievers, and along the way he's become one himself."
Miller explained the way that these two factors work in his fourth-quarter (2006) letter to shareholders of the Legg Mason Value Trust as follows:
“Value investing means really asking what are the best values, and not assuming that because something looks expensive that it is, or assuming that because a stock is down in price and trades at low multiples that it is a bargain … Sometimes growth is cheap and value expensive. . . . The question is not growth or value, but where is the best value … We construct portfolios by using ‘factor diversification.' . . . We own a mix of companies whose fundamental valuation factors differ. We have high P/E and low P/E, high price-to-book and low-price-to-book. Most investors tend to be relatively undiversified with respect to these valuation factors, with traditional value investors clustered in low valuations, and growth investors in high valuations … It was in the mid-1990s that we began to create portfolios that had greater factor diversification, which became our strength …We own low PE and we own high PE, but we own them for the same reason: we think they are mispriced. We differ from many value investors in being willing to analyze stocks that look expensive to see if they really are. Most, in fact, are, but some are not. To the extent we get that right, we will benefit shareholders and clients.”
Miller currently holds the position of chairman of the board of trustees of the Santa Fe Institute. This is an organization that conducts multidisciplinary research into complex systems theory.
about Bill Miller include: Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".
Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".