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Bill Miller’s fall

I really do admire fund manager’s sometime and one especially Bill Miller. He has the reputation for a very long outperformance of S&P500 and that is an enviable record.

Last year there is an opportunity to buy into his flagship fund in Singapore. I was tempted to, but decided to stick to my investment strategy.

That value fund coming to Singapore investors could be what was screaming out to be the biggest contrarian indicator we need. Since then, most of his moves have been bad. I think he must be suffering from extreme turn in Feng Shui.

In the Stock Picker’s Defeat, there were many interesting things highlighted:

He was invested in financials at the wrong time.

Mr. Miller was in his element a year ago when troubles in the housing market began infecting financial markets. Working from his well-worn playbook, he snapped up American International Group Inc., Wachovia Corp., Bear Stearns Cos. and Freddie Mac. As the shares continued to fall, he argued that investors were overreacting. He kept buying.

It ain’t easy to be a value investor. Even experienced managers like him misunderstood.

“The thing I didn’t do, from Day One, was properly assess the severity of this liquidity crisis,” Mr. Miller, 58 years old, said in an interview at Legg Mason Inc.’s Baltimore headquarters.

Mr. Miller has profited from investor panics before. But this time, he said, he failed to consider that the crisis would be so severe, and the fundamental problems so deep, that a whole group of once-stalwart companies would collapse. “I was naive,” he said.

[Stock Picker's defeat]

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