Bill Miller: bad, bad year

is cat is down 31% YTD then Freddie and Fannie get pounded today. common gets wiped out. how did Miller become the # 1 holder of FRE in august!@??? man, talk about a nasty year!!!

We should send Bas Reuten to nail him. Willy

Fooled by randomness.

These were his “I told you so stocks” too. Bill had 1.14% of the portfolio he manages for us in Freddie as of Friday - kiss that good bye… If he can hit -40% for a 12 month period, I will be impressed.

His fund was up a decent amount today; I wonder if he sold it already? If you want to see mutual fund pain, check out the fidelity select home finance. Down almost 16% in one day.

I’ll take Ken Heebner over Bill Miller any day.

heebner has his -25% quarters too by the way…many of them, in fact.

one of his peers called his recent underperformance “deferred outperformance”. ok that’s one heck of a deferral tho.

I’ve been pounded bad in the last 6 weeks. Knowing that Bill Miller - with a great track record, a sensible investing strategy I respect, and way more experience than me - also got pounded helps me lick my wounds a little easier. I find what’s happening in the market very difficult to understand, other than that people have lost their mind/nerve and are grasping at straws to save them. Soros says to get out of the market if you don’t understand what’s going on; although it’s also the chance to win big if the rules of the game haven’t truly changed. If I had a counterthesis - some logic I’d overlooked and thought was now happening, I’d get out right quick, but for now I’m just hoping the market won’t stay irrational longer than I can stay solvent (well, I don’t have *everything* at stake here).

As I have stated in the past - we’re looking at DEFLATION in the now. Anybody investing in commodities, hell anything, is going to lose their shirt. A bond market collapse is not out of the realm of possibilities, especially if Paulson, the leader of the U.S.S.R, keeps on bailing out the rich and connected. How’s that Bazooka working for you Hank? How do you respect Bill Miller’s strategy? The guy is fn clueless to what’s going on, and what has been going on, in the economy the past 7 years. He’s an arrogant person who still thinks, emphasis on the word “thinks”, that his valuation model can spit out winners in any market environment. Sorry, Bill, but why don’t you get off your azz and see what’s going on in the real world. Get out of the office and do some analysis on ground zero. I mean the guy beat the S&P500 for 15 straight years. The last 3 years, WAY behind. How far behind? Relative to his peers his trailing 10yr, 5yr, 3yr, and 1yr returns are in the lowest quartile. Just another manager who can’t beat the market long-term. In my opinion, him not changing his strategy after getting burned on CFC and BSC, and DOUBLING down on FRE says something. What? Hope is not a sound investment strategy. And I wholeheartedly agree, that if one doesn’t understand the ins and outs of deleveraging. GET OUT OF THIS MARKET NOW!

So what causes deflation? Just overinvestment in commodities? It looks like the Fed is prepared to print masses of money to bail out anything that looks systemic - so that’s anything financial over some critical size. And we haven’t seen HELOCs and Credit Card ABSs crater on the front page yet, so the credit crisis hasn’t fully passed. More money to print then. And foreigners aren’t buying our credit like they used to. It’s got to be inflation ahead for the US, probably stagflation, possibly hyperstagflation. I don’t see where deflation comes into the picture. What is the catalyst for deflation? Bazookas, Helicopters: this is feeling like a scene from Black Hawk Down.

I’m not a cynic but here’s how the gubmint does it: When asset prices are skyrocketing and cpi is tame… we have moderate, healthy, containted inflation. When asset prices are dropping and cpi is skyrocketing… we have deflation. When asset prices are skyrocketing and cpi is skyrocketing… we have cause for concern that the economy may soften and introduce deflationary forces.

Good thing we have Virgin to translate. I think we’re looking at dollars becoming useless…

Ok so rapidly falling asset prices effectively take dollars out of circulation, causing deflation because the remaining dollars will purchase a larger quantity of whatever is left to buy. How does that jibe with a rising CPI? I guess it means that bread and milk are getting expensive, but you can get a Lexus for cheap. So maybe we have inflation for necessities and deflation for luxuries.

Since when did CPI jibe with anything going on in the real world?

Deleveraging is the the cause of deflation. Deleveraging is the disappearance of excess credit. There are 3 stages to a depression that is coming to a locale near you: 1) boom (credit growth is greater than productivity, which results in “phantom” wealth) 2) bust (surging inflation due to 1) 3) Lucifer (deleveraging and depression) This is IMO the biggest bust since the Depression. I mentioned in my previous post that a bond market collapse is not out of the realm of possibilities. The Fed trying to hyperinflate might just as well trigger this. If past is precedent…LOOK OUT.

bchadwick Wrote: ------------------------------------------------------- > I’ve been pounded bad in the last 6 weeks. > Knowing that Bill Miller - with a great track > record, a sensible investing strategy I respect, > and way more experience than me - also got pounded > helps me lick my wounds a little easier. > That’s fine and dandy if you’re also doing as good when he’s in the black.

OK cfa_gremlin, I see your logic better, but what’s the investment implication? All cash?

All cash or short-term 4-week T-bills. I’m all cash except my speculative account which is all shorts. If you have more than 100k in a bank - only keep 100k and take the residual to put under the mattress. FDIC is UNDERFUNDED imo. IndyMac alone took away 10% of the entity’s funds. I’m sorry if people think I’m a nutcase or Dr. Gloom and Doom, but I’ve been right about what’s been unfolding in the past year and I fear that we are in uncharted waters right now and approaching that terminal wave in the “perfect storm” IMO - we will have rallies in this bear market, just like August to October 2007, March to May 2008 , and that little ole rally from mid July to Aug 2008 etc… My thesis is that SPX sees 3 digits before a bottom is in, which is a long way away.

former trader Wrote: ------------------------------------------------------- > bchadwick Wrote: > -------------------------------------------------- > ----- > > I’ve been pounded bad in the last 6 weeks. > > Knowing that Bill Miller - with a great track > > record, a sensible investing strategy I > respect, > > and way more experience than me - also got > pounded > > helps me lick my wounds a little easier. > > > > That’s fine and dandy if you’re also doing as good > when he’s in the black. I was referring more to Bill Miller’s letter where he talks about how the traditional guidelines of investing - like, if it’s in the newspapers, it’s probably already in the price - just don’t seem to be working. I’m still a goldbug, because I still think the dollar is going down the toilet (I had thought we might be in for a pause or levelling, but Hank’s Bazooka has me bearish again). All cash might be good, but maybe not US cash. Still, I’ve been pummeled pretty bad pretty fast. Some of it has been money that was “parked” in commodities while waiting for other alternatives. Most investors I talk to don’t like to use trailing stops, but I’m starting to think they are better suited to my style. It’s late and I’m rambling here.