Fallen star Bill Miller, of Legg Mason, is back — with stock tips. Via Bloomberg:
“Financials have the biggest potential to outperform” other stocks because of how far they’ve fallen in the worst bear market since the Great Depression, Miller said yesterday in an interview at a conference organized by the Investment Company Institute in Washington. The Standard and Poor’s 500 Financials Index tumbled 52 percent in the past year, compared with the 35 percent drop by the S&P 500 Index.
Miller, 59, whose Legg Mason Value Trust fund beat the S&P 500 a record 15 straight years through 2005, trailed the benchmark for the next three years as investments in homebuilders and banks soured. Those holdings led Value Trust to a 55 percent loss in 2008. The fund rose 8.7 percent this year through yesterday, leading the S&P 500 by about 5.9 percentage points.
Disregarding the perils of actually taking investment advice from a man who called a bottom in US equities back in December, you have to wonder just how far back up he expects the banking stocks to go. While financials like Citi and Bank of America are still languishing well below their 2007/2008 levels (with good reason), a bank like Wells Fargo, which is named as a Miller favourite in the Bloomberg story, is getting tantalisingly close to its early 2008 levels already.
Related links:
Bill Miller calls a bottom - FT Alphaville
Crisis? What crisis? - FT Alphaville
