What Happened The Last Time Bill Miller Had A 'No Brainer'?

Not a segment goes by on today’s business media when we have not heard that “Bill Miller says AAPL is a no brainer.” Of course, it is no surprise that markets have no memories but to heed the vehement advice of an almost self-proclaimed dip-buyer who told the New York Times that “not understanding the systemic nature” of the market “was his biggest mistake,” in the new normal of too-bigger-to-fail banks and ever-longer collateral chains seems risible. As to his confidence, we remind those who care, that on Dec 3rd 2008, Miller said the “bottom has been made” in U.S. equities. Trade accordingly…


and financials collapsed another 57% before finally finding their lows…


And today on AAPL and MSFT.. “no brainer”


Via Reuters,

Legg Mason’s Miller: “Bottom’s been made” in stocks
Wed, Dec 3 2008

NEW YORK, Dec 3 (Reuters) – Legg Mason’s star stock-fund manager Bill Miller said on Wednesday the “bottom has been made” in U.S. equities and that the Federal Reserve should consider purchasing stocks and junk bonds to pull the United States out of the financial crisis.

Speaking at Legg Mason’s annual luncheon for media, Miller said that all long-term investors believe that stocks today are cheap.


Via Time,

What We Can Learn from a Legendary Fund Manager’s Retirement


In the end, Bill Miller was doing what he had always done. But it stopped working, and now the legendary mutual fund manager is retiring. His inglorious departure from Legg Mason Value Trust offers a telling lesson in the perils of blindly sticking to what has succeeded in the past.



But things went very wrong for Miller after that, especially when the financial crisis hit and he failed to comprehend the depth of the problems at banks and the severity of the recession. He began loading up on falling bank stocks much too early and in 2008 his fund lost 55% of its value.



But the investment world turned upside down after the financial crisis of 2008. While Miller was buying cheap bank stocks, they kept getting cheaper. He was betting heavily on the sector to spring back to life, a prospect that even now – nearly four years later – seems distant at best. As Miller told The New York Times:


“The crisis was the biggest mistake we made — not understanding the systemic nature of what was happening. … We had it completely wrong.”


It would be simplistic to say that all Miller did was buy dips, though that was a big part of his strategy.


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