William H. Miller III was born in 1950 in Laurinburg, North Carolina, and graduated with honors from Washington and Lee University in 1972 with a degree in economics.
William H. Miller III was born in 1950 in Laurinburg, North Carolina, and graduated with honors from Washington and Lee University in 1972 with a degree in economics. ◦ He pursued a PhD in philosophy at Johns Hopkins University while working part-time in accounting. ◦ He served in the U.S. Army from 1972 to 1975 as a First Lieutenant, received the Army Commendation Medal for meritorious service with the 502d U.S. Army Security Agency Company, and left as a Captain. ◦ Miller joined Legg Mason Capital Management in 1981 as a security analyst, received his CFA designation in 1986, was elected chairman and chief investment officer in 2007, turned over the Value Trust fund to Sam Peters in 2012, and ended his relationship with Legg Mason in 2016 before founding Miller Value Partners. ◦ He lost more than $100 million on large investments in Bear Stearns during the 2008 financial crisis, and a $10,000 investment in his Opportunity Trust fund at the end of 2006 shrank to just $4,815 by the end of 2011. ◦ He was portrayed as a comically overconfident character in The Big Short defending his Bear Stearns bet as the stock plummeted. ◦ Reflecting on his career, Miller said running his smaller firm is "liberating." ◦
Miller believes any stock can be a value stock if it trades at a discount to its intrinsic value. ◦ He uses factor diversification, owning both high P/E and low P/E, and high price-to-book and low price-to-book names. ◦ He stated, "Growth is an input into the calculation of value. Companies that grow are usually more valuable than companies that don't." ◦ He also stated, "Companies that earn returns on capital above their cost of capital create value; those that earn below it destroy value." ◦ Miller summarized his approach with the phrase "lowest average cost wins." ◦ He wrote that "Since no one has privileged access to the future, forecasting the market is a waste of time" and that "Time, not timing, is key to building wealth in the stock market." ◦ He observed that "all of the value depends on the future" while "100% of the information that you have is based on the past." ◦ Miller believes active management "is in secular decline" and that "active in the aggregate doesn't add anything." ◦
Miller's portfolio beat the S&P 500 Index for 15 consecutive years from 1991 to 2005. ◦ He said of the streak, "As for the so-called streak, that's an accident of the calendar. If the year ended on different months it wouldn't be there." ◦ He stated, "When a stock drops and we believe in the fundamentals, the case for future returns goes up." ◦ He noted that "Most people like to buy after a stock has gone up... they sell after a stock has declined." ◦ He distinguished between real and perceived risk, stating that "Real risk and perceived risk are two different things... people perceive risk to be high when prices are low." ◦ He argued that "Lower prices, other things equal, are always better than higher prices if you're actually an investor" and that "If you can't buy into the market when prices are falling... then you can't buy at all." ◦ In his 3Q 2020 market letter, he wrote that "selling during a selling panic is rarely an effective strategy." ◦ He argued that value stocks, whose valuations relative to growth stocks were at or near all-time lows, would do much better, while financials should shine as the yield curve steepens and net interest margins increase. ◦ On Bitcoin, he framed it as "an insurance policy against financial catastrophe," noting the supply grows about 1.7% per year, so "the only question you have to ask about Bitcoin is, over long term, will the demand exceed" that supply growth. ◦ He also noted, "With Bitcoin, we can't be wiped out by the government." ◦ He said the best investment decision he ever made was buying Amazon on the IPO, and the worst was selling a share of Amazon. ◦
Miller views markets as a discounting mechanism, stating, "If it's in the papers, it's in the price. Meaningful price changes only occur when new, previously unexpected information appears." ◦ He prioritizes longer time horizons, noting that "Thinking three years ahead is likely to be more effective than thinking three to six months ahead." ◦ He emphasizes process over outcomes, stating, "The most important thing is not so much the performance as the process." ◦ He distinguishes between price and value, observing that "Stock prices change far more rapidly than does intrinsic business value." ◦ He frames capital allocation through an economic lens: "Companies that earn returns on capital above their cost of capital create value; those that earn below it destroy value." ◦ He conceptualizes Bitcoin through a supply-and-demand and insurance model, noting its supply grows about 1.7% per year and that the key question is whether long-term demand will exceed that growth. ◦
Miller holds a degree in economics and pursued a PhD in philosophy. ◦ He worked part-time in accounting and received his CFA designation in 1986. ◦ He has deep experience in security analysis and portfolio management, having served as chairman and chief investment officer at Legg Mason Capital Management and later founding Miller Value Partners. ◦ He demonstrated expertise in factor diversification and valuation frameworks across P/E and price-to-book spectrums. ◦ He has made notable investments in technology, such as Amazon, and in alternative assets, such as Bitcoin. ◦ He has also analyzed macroeconomic conditions such as yield curve steepening and net interest margins for financial stocks. ◦
Miller is known for dismissing conventional milestones, as evidenced by his statement, "As for the so-called streak, that's an accident of the calendar. If the year ended on different months it wouldn't be there." ◦ He adopts a contrarian stance toward market anxiety, stating, "When I am asked what I worry about in the market, the answer usually is 'nothing', because everyone else in the market seems to spend an inordinate amount of time worrying." ◦ He frequently uses philosophical framing, attributing part of his edge to his graduate studies and stating, "I doubt I would have been as successful without going to graduate school in philosophy." ◦ He communicates market mechanics through aphorisms, such as "If it's in the papers, it's in the price." ◦
Miller achieved a 15-year streak of beating the S&P 500, yet he dismissed it as an "accident of the calendar." ◦ He built his reputation on active management, but he believes "active management is in secular decline" and that "active in the aggregate doesn't add anything." ◦ He advocates buying when prices fall and not letting price confuse him about fundamentals, yet he lost more than $100 million on Bear Stearns during the 2008 financial crisis and was portrayed as comically overconfident in The Big Short defending his Bear Stearns bet as the stock plummeted. ◦ He attributes part of his edge to philosophy, stating, "I doubt I would have been as successful without going to graduate school in philosophy." ◦
Engage with Miller by focusing on business fundamentals rather than stock price movements, as he does not let the price of a company's stock confuse him about a company's fundamentals. ◦ Emphasize process over short-term performance, because he believes "The most important thing is not so much the performance as the process." ◦ Adopt a multi-year time horizon, as he finds "Thinking three years ahead is likely to be more effective than thinking three to six months ahead." ◦ Avoid market forecasting, since he holds that "Since no one has privileged access to the future, forecasting the market is a waste of time." ◦ Be prepared to discuss contrarian buying during downturns, as he believes "Lower prices, other things equal, are always better than higher prices if you're actually an investor." ◦