Legendary value investor Bill Miller sees new opportunities in the stock market amid a brutal sell-off this year, urging investors to take advantage of discounted stocks while remaining optimistic about Bitcoin
Speaking at the Forbes/SHOOK Top Advisor at the Encore At Wynn Hotel in Las Vegas on Thursday, ex League Mason
While at the Baltimore investment giant, Miller gained prominence by outstripping the S&P 500 Index annually from 1991 to 2005. He eventually came out on his own, serving as Chairman and Chief Investment Officer at Miller Value Partners, which had $1.9 billion in assets under management at the end of August 2022. In January, Miller announced that he would retire at the end of the year, outline succession plans for his two major funds, and transfer management to his son, Bill Miller IV, and long-daughter Samantha McLemore.
Speaking with Marvin McIntyre, Managing Director of Morgan Stanley Private Wealth Management at the Forbes/SHOOK Top Advisor Summit, 72-year-old Miller reflected on the stock market, cryptocurrency, and the Federal Reserve.
“The stocks that operated in the recent bull market for the past 10 years or so until last November are now being crushed,” he explained, adding, “High rates are putting pressure on growth.” His advice to investors? Buy shares of publicly traded companies at cheap and low prices.
Miller is best known for buying Amazon, his favorite stock, in the company’s initial public offering in 1997. He has been a longtime believer in the company’s burgeoning e-commerce business and has steadily increased his holdings over the past two decades.
The popular value investor remains undeterred by the recent stock sell-off for this reason: “If your time horizon is longer than one year, you should be doing well in the market,” Miller said, noting that prices are now “significantly down.”
In terms of stock selection, it identifies companies that have strong and free cash flow trends but are trading at discounted stock values. Among them are some of the worst performers of the year: Norwegian Cruise Line Holdings
Miller also loves Delta AirlinesNoting that the company stood out among airlines because it did not dilute shares with new shares during the pandemic, which paid off with improved free cash flow trends. One of his most under-the-radar picks is clear insurance, a profitable technology company with a subscription-based business that specializes in document verification at US airports. Miller predicted that the market value could swell from more than $3 billion to $30 billion in ten years as the company anticipates more big deals with major stadiums.
Other notable selections from the famous investor included Silvergate Capitala federally regulated bank with a crypto exchange, and Chesapeake Energy
He also criticized the Federal Reserve for “talking about a difficult game.” [on inflation] But psychologically behind the curve.” The central bank “interacts with [economic] The data is “too much rather than focusing more on immediate or forward-looking indicators,” Miller said, adding that these “indicate they may go too far” in raising rates.
Miller, who was an early advocate and buyer of bitcoin, reiterated his bullish view of the cryptocurrency, calling it “misunderstood.” Although prices can be volatile, bitcoin can provide investors with an “insurance policy against financial catastrophe,” he said. If the Fed tightens monetary policy too much, bitcoin prices will likely be better than most of the market, Miller predicted. What’s more, because it is “unrelated to the rest of the financial system,” there are “limited repercussions” during turbulent market periods.
Although many investors could be concerned about the current uncertainty in the markets, Miller quoted the advice of Warren Buffett, John Templeton and Leo Tolstoy for guidance, respectively. “There is greed when others are afraid”; “A time of maximum pessimism is the best time to buy”; and “The two strongest warriors are patience and time.”
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