This week, we speak with Bill Miller. He is the legendary stock picker at Legg Mason Capital Management who beat the Standard & Poor’s 500 Index for 15 consecutive years from 1991-2006.
In a wide-ranging discussion, Miller talks about everything from his stock selection process, his infamous streak, and what he got wrong during the financial crisis.
He recently said that “stocks are stupidly cheap but bonds are ridiculously over-priced.” Miller also has an intriguing theory about why investors have been abandoning active investments — he blames the Active fund managers are actually high-priced closet indexers. His fund’s biggest position is Amazon (prior guest Aswath Damodaran, also said interesting things re: AMZN).
I found him to be thoughtful, honest and quantitative in his analysis, and a deep philosophical thinker about markets and investing. Miller is widely read, enjoying everything from books on market history to philosophy, quantitative analysis, biography, military history as well as classics (all of the books mentioned can be found here).
About the Masters in Business Podcast:
About Masters in Business
Coming July 12: Masters in Business on Bloomberg Radio (July 8, 2014)
100th Episode of Master in Business Podcast (July 25, 2016)
All prior podcasts can be found at:
Books referenced are after the jump.
Books recommended by Bill Miller:
• The Money Game, Adam Smith
• Super-Money, Adam Smith
• Reminiscences of a Stock Operator, Edwin Leferve
• Fortune’s Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street, William Poundstone
• Pragmatism, by William James
• The Varieties of Religious Experience, by William James
• Mind & Cosmos: Why the Materialist Neo-Darwinian Conception of Nature is Almost Certainly False by Thomas Nagel
• A Treatise of Human Nature, David Hume
• World as Will & Representation by Arthur Schopenhauer (1788-1860, German Philosopher)
• Amazon.com: Douglas MacArthur: American Warrior by Arthur Herman
• American Ulysses: A Life of Ulysses S. Grant by Ronald C. White
Robinson Crusoe by Daniel Defoe
• Frankenstein by Mary Shelley
• Sapiens: A Brief History of Humankind by Yuval Noah Harari
• Homo Deus by Yuval Noah Harari
• Star Maker by Olaf Stapledon