Bill Miller Will Work for $72 Million

Earlier this week, Bloomberg reported Bill Miller Back on Top as ‘Great Rotation’ Lifts Stock Losers, to which Barry Ritholtz retorted, Bill Miller “Back on Top”? Not Exactly . . .

We applied Truth Serum to the numbers going back to 1994 and calculated that Miller’s Legg Mason Capital Management Value Trust (LMVTX) lagged the S&P 500 Index by far on a volatility-adjusted basis. The fund should have returned 350% rather than 215% given the level of volatility.

The lesson? Hug the index if you have to and when that stops working, make some big bets because even if you lose, no one will remember. If you win, Bloomberg tells everyone you are BACK ON TOP!

If there is one thing I learned in the securities industry, it is memories are very short. The name of the game is COLLECT FEES. 1.76% of $4,100,000,000 is $72,160,000 per year come what may. Laugh all the way to the bank while we blog about it for free.