Back to top

Real Time Insight

Legg Mason reported on Thursday that long-time Value Trust fund manager Bill Miller will be stepping down in April of next year. Miller has been with the firm since the early 80's and had an impressive streak of beating the market for 15 consecutive years from 1991 through 2005. But he's given all of that outperformance back over the last few years, including a devastating 55% loss in 2008.

Over the last few years Miller had shifted to more of a growth manager who didn't mind high valuations because the companies would be worth much more 5-10 years down the road. And when many of these glamour stocks couldn't deliver the growth that was expected (and they often don't), Miller would often double or triple down, making his mistakes even worse.

Miller got caught up in value traps too. Hindsight is always 20/20, but here's an article from late 2007 where he was touting bank stocks, Freddie Mac and homebuilders. Ouch. That's a good example of why you should avoid companes with significant negative estimate revisions. Sometimes stocks are "cheap" for a good reason.

This just goes to show that even experienced investors like Bill Miller can fall victim to paying too much today for tomorrow's growth and getting caught in value traps!

 

Just Released: 5 Stocks to Double

Today, you are invited to download a free Special Report from Zacks Investment Research. It reveals five moves that could gain +100% and more in the next 12 months:

One is a "boring" business delivering blistering growth. Another is a red-hot oil and gas producer set to surge on a drilling breakthrough. Still another, an online payment provider, ignited a 53% sales explosion during the past year.

Close This Panel X

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SYNAPTICS I… SYNA 78.11 +8.14%
GREEN PLAIN… GPRE 39.41 +5.12%
PILGRIM'S P… PPC 28.82 +3.08%
SKYWORKS SO… SWKS 52.07 +2.58%
CLAYTON WIL… CWEI 109.08 +2.51%