Bill Miller of Legg Mason Calls a Bottom (Hello Bottom? Please God, a Bottom!)

Thomson Financial News
Legg Mason Value Trust's Bill Miller forecasts 'worst is behind us'
04.23.08, 2:51 PM ET

SAN FRANCISCO (Thomson Financial) - Legg Mason Inc.'s Bill Miller, portfolio manager of Legg Mason Value Trust mutual fund, on Wednesday issued his first-quarter investment commentary to shareholders, projecting that the credit panic ended with the collapse of Bear Stearns.

'For planning purposes, here is my forecast: I think we will do better from here on, and that by far the worst is behind us,' Miller wrote. 'If spreads continue to come in, the write-offs at the big financials will end, and we may even have some write-ups in the second half instead of write-downs'

Miller noted that the wild card is commodities. (Another wild card might be the fund redemptions and margin calls Legg Mason Value Trust is getting as it hits 26 year lows. Bill's stuck now, he's got to keep going forward and hope for the best or call it a day. - Jesse)

'If commodities break, or even just stop their relentless rise, equity markets should do well,' he wrote. 'If they continue to move steadily higher, they have the potential to destabilize the global economy. We are already seeing unrest in many countries due to the soaring prices of rice and other grains.'

The weak dollar is another culprit of the commodity cycle, Miller said. However, he noted that the stage is set for 'what should be an improving environment for investors in stocks and in spread credit products. (Yes, things are looking just great. He's full steam ahead into the heart of a perfect financial storm like the skipper of the Andrea Gail - Jesse)

'Our portfolio, in my opinion, is in excellent shape, despite, or more accurately because of, its performance,' Miller said. 'Prices have declined substantially more than business values.'

Legg Mason Fund Hits 26 Year Low - Washington Post - April 5, 2008

The fund's top 10 holdings as of March 31 are Amazon.com Inc. at 6.5%, AES Corp. at 6.4%, JPMorgan Chase and Co. at 5%, Aetna Inc. at 4.9%, UnitedHealth Group Inc. at 4.5%, Yahoo Inc. at 4.4%, eBay Inc. at 4.2%, General Electric Co. at 4%, Sears Holding Corp. at 4%, and Federal Home Loan Mortgage Corp. at 3.5%.

The Legg Mason Value Trust dropped 19.7% in the quarter, compared with a loss of 9.4% for the S&P 500.

Shares of Baltimore-based Legg Mason were up 55 cents, or almost 1%, at $58.62.

Katherine Hunt

Legg Mason's Bill Miller Says 'The Worst is Over' - Forbes

We were going to give Bill the Pigman of the Week Award but the pigs started to complain.