Legendary value investor Bill Miller says Buy Bitcoin and 8 Other Stock Bargains
Miller will retire at the end of 2022.
Jamel Toppin/Forbes Collection
Legendary value investor Bill Miller sees new opportunities in the stock market amid the brutal selloff this year, urging investors to take advantage of stocks trading at a discount while remaining bullish on Bitcoin
The former Legg Mason spoke at the Forbes/SHOOK Top Advisor Summit at the Encore At Wynn hotel in Las Vegas.
While at the Baltimore investment giant, Miller rose to prominence by outperforming the S&P 500 annually from 1991 to 2005. He eventually went out on his own, serving as chairman and chief investment officer of 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, and outlined succession plans for his two main funds, handing over leadership to his son, Bill Miller IV, and longtime protege, Samantha McLemore.
Speaking with Morgan Stanley Private Wealth Management CEO Marvin McIntyre at the Forbes/SHOOK Top Advisor Summit, the 72-year-old Miller reflected on the stock market, cryptocurrencies and the Federal Reserve.
“Stocks that worked in the last bull market of the last ten years or so through last November are now getting crushed,” he described, adding, “rising rates have caused growth compression.” His advice to investors? Buy shares in companies that are trading at cheap, discounted prices.
Miller famously bought Amazon, his favorite stock, at the company’s IPO in 1997. He has long believed in the company’s booming e-commerce business and steadily increased his holdings over the past couple of decades.
The famed value investor remains undeterred by the recent stock selloff for that reason: “If your time horizon is longer than a year, you should do very well in the market,” Miller said, noting that prices have now “fallen significantly.”
When it comes to stock selection, he identifies companies that have strong free cash flow trends but trade at discounted share values. These include some of the year’s worst performers: Norwegian Cruise Line Holdings
The famous value investor believes shares have come down to attractive values after a sell-off so far this year.
Jamel Toppin/Forbes Collection
Miller also likes Delta Air Lines, noting that the company stood out among airlines because it did not dilute shares with new equity during the pandemic, which has paid off with improved free cash flow trends, he said. One of his more under the radar is Clear Secure, a profitable technology company with a subscription-based business specializing in document verification at US airports. Miller predicted that the market value could go from over $3 billion to $30 billion in ten years as the company signs more big deals with big stadiums.
Other notable picks from the famous investor included Silvergate capitala Fed-regulated bank with a crypto exchange, and Chesapeake Energy
He also chided the Federal Reserve for “talking about a tough fight [on inflation] but to be psychologically behind the curve.” The central bank is “reacting to [economic] data” too much instead of focusing more on real-time or forward-looking indicators, Miller said, adding that these signs “suggest they may go too far” in raising rates.
An early proponent and buyer of Bitcoin, Miller also reiterated his bullish view on the cryptocurrency, calling it “misunderstood.” Although prices can be volatile, Bitcoin can provide investors with “insurance against financial disaster,” he argued. If the Federal Reserve tightens monetary policy too much, Bitcoin prices will likely outperform most of the market, Miller predicted. Also, because it is “not connected to the rest of the financial system”, there is “limited fallout” during tumultuous market periods.
Although many investors may worry about the current uncertainty in the markets, Miller cited the advice of Warren Buffett, John Templeton and Leo Tolstoy respectively for guidance. “Be greedy when others are afraid”; “The time of maximum pessimism is the best time to buy”; “The two most powerful warriors are patience and time.”
