Bill Miller again

My Dearest Moo Moo Cow,

Saw your postings on Bill Miller: http://everything27.blogspot.com/search?q=bill+miller

Bloomberg has a new article on Bill: Bill Miller, Mired in Worst Slump of Career, Embraces AES, Tyco

• On board, Legg Mason Inc. money manager Bill Miller was bracing for the blow: The market, he knew, had beaten him at last. His streak -- 15 years of besting the Standard & Poor's 500 Index -- had come to an end. The final numbers showed he'd returned 5.9 percent in 2006, trailing a 15.8 percent gain by the S&P 500.

I will take his track record anytime, wouldn't you? And I have nothing but admiration for what he has achieved. Listen to his following set of comments.

• ``We are paid to do a job, and we didn't do it this year -- which is what the end of the streak means -- and I am not at all happy or relieved about that.''
  
  Miller says he has no plans to change tack just because he's had one bad year. He realized as early as July 2006 that his streak was in jeopardy. All year, nervous clients kept calling.
  
  ``I got asked, `How do you go about analyzing your mistakes?''' Miller says. ``I said, `I don't. I don't analyze my mistakes.' We will analyze spectacular errors, but not garden variety errors.''
  
  His record puts him in the same league as his friend Buffett, whose Berkshire Hathaway Inc. delivered an average annual return to shareholders of 18.8 percent from 1991 to 2005. Buffett, unlike Miller, beat the S&P 500 in 2006, with a 24.2 percent return.

And the issue of luck or skill?

• Luck or Skill?
  In his January letter to investors, Miller said that if beating the market were purely random, like tossing a coin, then the odds of beating the S&P 500 for 15 consecutive years would be the same as the odds of tossing heads 15 times in a row. Using the actual probabilities of beating the market in each of the years from 1991 to 2005, he put his odds at 1 in 2.3 million.
  ``So there was probably some skill involved,'' Miller said. ``On the other hand, something with odds of 1 in 2.3 million happens to about 130 people per day in the U.S., so you never know.''

Absolutely class!