It is a rarity that we highlight the work of another portfolio manager, unless his name is Warren Buffett. Maybe there’s a pride issue there, that we believe we are better writers than others, or we are so contrarian that we are apt to go the opposite direction of every so-called “expert” in our business. But when the writer is Bill Miller, and it is his last market letter before he sails into the sunset of his career, we must pay homage. His fund, Legg Mason Value Trust, outperformed the S&P 500 in 15 straight years, from 1991-2005. He was the Ken Jennings of fund managers, in Jeopardy parlance. The outperformance came to an abrupt end as he doubled down on financials and homebuilders when they fell, a horribly bad call. He pivoted to growth stocks thereafter and has ridden the bull market since, most of those years at the helm of his own family office, having retired from Legg Mason.
Hard to believe that in one page he can synthesize his investment philosophy, put today’s worries into context, and offer a short-term market forecast, all while conveying that this is his capstone quarterly letter. Among his many pithy quotes: “We believe time, not timing, is key to building wealth in the stock market.” After 40 years, and billions earned for clients, you earn the right to make that claim! Also: “all the relevant worries seem to be covered.” Hopefully you find he validates (or at least corroborates) our focus on the long-term. Enjoy.