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Are Investors Getting Tired Of Bill Miller's Permabullishness?

Tyler Durden's picture


Is Bill Miller headed for retirement? Today's action in Legg Mason stock, which was down 10%, the most since May 2009, sure indicates investors may have had enough of the permabullish, pro-cyclical portfolio manager. The reason for the dramatic drop in stock price: accelerating outflows. From the press release filed earlier:

  • Total outflows were approximately $33 billion for the quarter ended December 31. Fixed income, equity and liquidity outflows were $24 billion, $4 billion and $5 billion, respectively.
  • At December 31, 2009, fixed income represented 54% of total AUM, equity 25% and liquidity 21%.
  • AUM for U.S. domiciled clients was 65% of total AUM and, for non-US clients, 35%. By business division, 69% of AUM was in the Americas Division and 31% of AUM was in the International Division.
  • Average AUM during the quarter was $693.3 billion as compared to $684.0 billion in the second quarter of fiscal 2010 and $745.1 billion in the third quarter of fiscal 2009.

The bad news cherry came from the conference call, during which CEO Mark Fetting disclosed that "one client pulled $5 billion from an
enhanced-cash fund."

And, of course, where this is pain to be had, one can usually find Nelson Peltz having recently gotten involved: the "activist" investor " last year
raised his stake in the firm to become the largest shareholder
with about 6 percent and was named a director in October." We fully expect LM's fate to follow that other Peltz "turnaround special"  Chemtura... which was a total loss to Trian.

Yet there was no definitive explanation for the acceleration in outflows:

“We’ve got work to do on the outflows,” Fetting said
today in an interview. “We are cognizant of the fact that it
takes some time for flows to follow performance and we are
working hard in conjunction with our distribution teams to
position ourselves to capture assets,” he said.

And the same traditional permabullish approach to negative events:

“In the next couple of quarters, there’s a very good
chance of swinging into inflows,” Fetting said.

There is also a very good chance the economy implodes. But keep hoping Mr. Fetting; we are certain that Bill Miller's Apple, Amazon, Google trifecta, which gets the Cramer treatment everyday, will keep finding incremental buyers from here to infinity, as soon to be broke prop traders decide to look at the help wanteds on their Kindles.


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Thu, 01/21/2010 - 15:52 | 201078 ghostfaceinvestah
ghostfaceinvestah's picture

Bill Miller is awful, he should have quit while he was ahead.

When Freddie was taken down, he was the largest shareholder.  What an idiot.

Thu, 01/21/2010 - 15:54 | 201082 earnyermoney
earnyermoney's picture

I'd like to get Leo's take on this news. Leo was willing to vouche for his investing acumen a couple of weeks ago.

Thu, 01/21/2010 - 16:37 | 201158 ghostfaceinvestah
ghostfaceinvestah's picture

why would that surprise you, Miller and Leo have the exact same mindset.

Thu, 01/21/2010 - 17:14 | 201203 earnyermoney
earnyermoney's picture

I'm not surprised just curious. I have been observing weighing commentary of various participants since this time last year. When the next correction comes, and it will, I'll be ready to participate in the game.

Thu, 01/21/2010 - 15:56 | 201083 anynonmous
anynonmous's picture

Where is Leo?


He had some interesting comments about Bill Miller a week or two ago.

Thu, 01/21/2010 - 17:20 | 201215 Leo Kolivakis
Leo Kolivakis's picture

I am right here. Before you all write off Bill Miller, keep in mind he did beat the S&P 500 for 15 years running:

Admittedly, this was during the bull run. Now, he is facing a slump but I am not as quick as all of you to write him off. And only an idiot would call him an idiot. Ray Dalio once asked me "son, what's you track record?" All of you pooing on Bill Miller, WTF is your track record?


Thu, 01/21/2010 - 17:56 | 201278 Anonymous
Anonymous's picture

Good question... so, what is yours, Leo?

Thu, 01/21/2010 - 20:51 | 201578 ghostfaceinvestah
ghostfaceinvestah's picture

Leo, you are like a fucking child, with your ad hominem attacks.

The point isn't what is everyone else's track record, because everyone else aren't putting themselves out there to manage other people's money.

The point is what is Bill Miller's long run track record vs his benchmark.  And not some select point in time.  LTCM had a great track record for years.

Thu, 01/21/2010 - 15:57 | 201084 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Where will they put their money if they do not want stocks, bonds, and do not want the DoeLarr?  DXY is running flat!  Silver snitches.

Thu, 01/21/2010 - 16:18 | 201119 ozziindaus
ozziindaus's picture

as of this minute, Gold down, Silver down, DOLLAR down, Amazon up.

Thu, 01/21/2010 - 17:24 | 201221 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Gold looked strong today.  It had major upside at the height of the storm.  Amazon spamazon.  AMZN is in a downtrend.  The bullshit stock I liked today was WFMI.  Gained as the market fell.  Can you say commodities?  Say it.....saay iit......

Thu, 01/21/2010 - 16:35 | 201154 RoastingBankers
RoastingBankers's picture

lmfao at bulls



bbq beef

Thu, 01/21/2010 - 16:40 | 201155 ghostfaceinvestah
ghostfaceinvestah's picture

another $12B of MBS bought this past week, what happens to the markets when this liquidity spigot gets turned off?


btw, note that once again almost all the purchases were fannies.  why the charade?  why doesn't Zimbabwae Ben just print a few suitcases full of money and drive them to Fannie's headquarters?

Thu, 01/21/2010 - 19:09 | 201388 deadhead
deadhead's picture

thanks Ghost.  your insights into the mortgage area are most helpful and I always look forward to reading your comments.  please keep up the good work and know that your thoughts are greatly appreciated.

Thu, 01/21/2010 - 19:10 | 201389 Dr o love
Dr o love's picture

why doesn't Zimbabwae Ben just print a few suitcases full of money and drive them to Fannie's headquarters?


Because he would need to take 10 million such suitcases in a convoy of semis and the sheeple just might notice.

Thu, 01/21/2010 - 16:38 | 201162 Brokenarrow
Brokenarrow's picture

Miller's combover is as outdated as his investment strategies.

Thu, 01/21/2010 - 16:43 | 201169 Chartist
Chartist's picture

I wonder if there's an indirect correlation between Bill Miller buying a yacht, the utopia, and the peformance of his fund?

Thu, 01/21/2010 - 17:17 | 201210 Anonymous
Anonymous's picture

where is Leo ?

Thu, 01/21/2010 - 19:54 | 201472 Hephasteus
Hephasteus's picture

I don't understand the Trifecta. If you are going to build Internet 2 running it all through the NSA using your newly corrupted and wholy screwed over university assets why google, apple and amazon. Is amazon going to be the sole propieter of the New New New internet economy and is going to run off Macs?

Fri, 01/22/2010 - 03:41 | 201990 Anonymous
Anonymous's picture

Leo is in a corner, crying and feeling all alone

Fri, 01/22/2010 - 10:21 | 202086 Anonymous
Anonymous's picture

Miller I believe lost 50% in 2008, then made 70% last year.

So $100 as of 1/1/08 is $85 as of 1/1/10

He is touting last year's gains while neglecting to mention that virtually all of his investors are underwater from 2007. Such BS and he is finally being rightfully punished as investors head for the exits.

Sat, 01/23/2010 - 07:15 | 203634 Anonymous
Anonymous's picture

I'm quite certain Bill Miller has lost more money for investors than he ever made because his AUM was so high during the collapse of his fund. His average annual returns over the past 15 year period are somewhat respectable, while over the past 10 years they are abysmal.

Sat, 01/23/2010 - 07:37 | 203639 Anonymous
Anonymous's picture

Legg Mason shows "investing legend" Miller's returns at this page.

Pretty unimpressive.

Do NOT follow this link or you will be banned from the site!