For Bill Miller to be subjecting himself to a front page, Business Section, New York Times piece was astounding. Miller runs the $12 billion Legg Mason Value Trust. Three of his largest holdings are (were) Countrywide, Bear Stearns and Yahoo!
Ouch! Why doesn’t this guy let someone else pick the stocks?
Miller defends his “take big bets” strategy as opposed to a more “spread the risk” indexing approach.
“I have never found it a useful policy because what it guarantees is that you will be in the worst sectors of the market as a matter of policy,” he said. “That is why so many managers are justly criticized as closet indexers because they don’t get too far away from the index because they are afraid to be wrong. My view is that being wrong is part of the business. You need to focus on making the best investments you can, instead of trying to smooth things out.”
Its one thing to bet big, but betting big on housing, debt creation and the also ran search provider is mindboggling.