The Man Who Beats the S&P: Investing with Bill Miller

Ok, this is a book which was a best seller when it was written, because Bill Miller had been a highly sucessful investor. BUT this sucess did not persist subsequently and people reading this book and following this strategy are likely to have been sorely disappointed. Certainly looking back at some of his investment choices now (Kodak etc) one is somewhat astonished. BUT it is only too easy to be smart in retrospect. I bought this book both because of the title but also because of a comment by the very insightful academic actuary and investor Guy Thomas (read his excellent book Free Capital for a study of the very differing ways different UK investors achieved success under the same account structures). GT is in a youtube seminar with investment managers when he looks at the probability retrospectively of finding an investment manager who has beaten the index or similar for 15 years- when you look at the number of managers and the number of 15 year periods (with widely varying economic environments) you could choose from the probability is actually quite high >>0.7 that you will find one of them has beaten the index. So the moral tale is consider Bill Miller's strategies but don't think that choosing them based on a retrospective analysis is finding some sort of undiscovered goldfield!

This book covers the investing career of Bill Miller, the celebrated fund manager of Legg Mason from 1981 to 2001. He became sole manager of Legg Mason Value Trust Fund in 1990 and continued to beat S & P 500 index for 15 consecutive years. This is phenomenal record by any standards. The author Janet Lowe has distilled Bill Millers investment process in great detail. Unlike most other value investors, Bill Miller invested in old economy and new economy stocks with equal confidence. He was a major investor in Amazon in 1999 and held close to 6% of shares in the company. The investment rationale for many stocks is explained by Bill Miller as well as his associates at Legg Mason. The Santa Fe Institute's views about economics of evolving technologies are like icing on the cake. Bill Miller has explained his valuation techniques and portfolio management with examples. At the end, Janet Lowe has covered each major investment by Bill Miller with description of business, charts, financial information and Bill Miller's rationale for buying each of those stocks in detail. This book will add lot of value to investment process of every serious equity investor.

No need for a lengthy review here. This is simply a superb book. We should all thank Janet Lowe for taking the time to write a book about Bill Miller's investment philosophy and process. What a treat this book is. I couldn't put it down. Bill Miller is one of the most gifted (and unique) investors on the planet today. Lowe's book is filled with investment wisdom. In my view, it is destined to become a classic. If you are one of the many people seeking to improve your investment performance, this is a must have book. Read it, study it, and prosper.

Lucky run that ended. Nothing learned.