Good interview with Bill Miller

There's a good interview with Bill Miller from Money magazine. Thanks to Value Investing Resource for pointing it out (this is one of the best value investing blogs covering daily news and events--I highly recommend it).

I personally consider Bill Miller to be one of the smartest investors around. I can't think of too many others who are highly intellectual with a broad knowledge base (his philosophy background probably had something to do with it--every philosopher-type I meet exhibit broad thinking). Here are a couple of comments, although not radically new, hammer home some value investing points:

If you have a valuation discipline, then you know that stock prices change more rapidly than business value.


You also know that rising stock prices mean lower future rates of return and falling stock prices mean higher rates of return. So I was much happier in the summer of '02 when you buy everything on sale than I was in the Spring of 2000 when a lot of things were super-expensive.



Warren Buffett has remarked on the second point mentioned by Bill Miller. Buffett mentions how you should look at stock buying as if you were shopping. When things fall in price, it's a sale and who is not happy to be buying products during a sale? People should be thinking the same way when buying stocks.

Miller's point basically implies that future returns may be low. I'm bearish on the markets but for those that are neutral to bullish, I think the fact that the market returns have been so good in the last 4 years literally means that future near-term returns will likely be low.

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