Amit Chokshi on 'Another Bill Miller Snowjob'
Value investor Amit Chokshi of Kinnaras Capital Management levels criticism at Bill Miller in a recent blog post, arguing that Miller has been overpaid given his lackluster long-term track record. Writes Chokshi:
It appears that Legg Mason is rolling out its public relations machine and finding amicable partners in the media to help bolster its reputation along with that of its most recognized fund manager Bill Miller. This Bloomberg article attempts to repair Miller's deservedly tattered reputation but the authors missed a few key points that potential Value Trust investors should consider.
The Bloomberg article points out that Miller's Value Trust fund rose 43% through December 23rd, beating 93% of its peers. This performance has led to some self-congratulatory comments with Miller stating "Even when things were really bad last fall, it was pretty clear that there would be a cyclical bullish phase to the market" and “It is too early to pat ourselves on the back...we’re just one year off of a very bad period, so we can’t get complacent."
This mentality of feeling like "you're back" after one good year despite prior years of destroying your investors capital through incompetent stock selection compounded by high fees is sickening, particularly to younger investment managers like myself. Rather than even consider complacency, Miller should feel shame in his long-term performance and disregard for any risk management. Miller should also show some level of concern for his investors as those that placed capital in Value Trust as far back as 1997 are underwater. Even worse, Miller and his team were highly compensated for this incompetence.
LEGG MASON VALUE TRUST ("LMVTX") HISTORICAL PERFORMANCE
