Bill Miller – A Profile

Bill Miller is currently the Chairman & Chief Investment Officer at Legg Mason Capital Management, Baltimore, USA. Bill Miller joined Legg Mason in 1981 and manages the Value Trust and Opportunity Trust mutual funds. He was Legg Mason's Director of Research from October 1981 through June 1985 and assumed overall responsibility for the equity funds management area of Legg Mason in late 1990. Prior to joining Legg Mason, he served as Treasurer of the J.E. Baker Co. Bill graduated, with honors, from Washington and Lee University

in 1972 with a degree in Economics. He is on the Board of Trustees at the Santa Fe Institute, a leading center for multidisciplinary research in complex systems theory. Bill received his CFA designation in 1986.

He is a portfolio manager of the Legg Mason Value Trust mutual fund, the after-fee return of which has beaten the S&P 500 index for 15 consecutive years from 1991 to 2006.

Investment Approach:

Bill has often being criticized that he is a growth investor in the garb of a value seeker, as his portfolio is dominated by so called growth stocks like Amazon, Nextlel, etc. However, as he correctly puts it, he is literally a “Value Investor”, a long term patient investor (and not trader as can be seen from his low portfolio turnover) who seeks value (which he defines as a deep discount to his assessment of intrinsic value). According to Mr.Miller, intrinsic value is not judged simply by the book value or earnings per share (EPS), but by free cash flow generation, return on capital employed and long term sustainable high RoCE growth. This value changes with passage of time and hence the models of value also need to be changed peiodically, which can make a stock which was expensive two years back at the same price, a value buy today. Thus, the heart of Mr.Miller’s investment philosophy is the judgment of intrinsic value and then buying the business at a deep discount to such value.