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Bill Miller on why he bought housing stocks (too soon)

Posted by: Peter Coy on September 14, 2007

Bill Miller.bmp
Legendary investor Bill Miller likes to buy out-of-favor stocks, and it’s hard to think of any stocks that are outer-of-favor (is that English?) than those of homebuilders.

Only trouble is, Miller, who manages the portfolio of Legg Mason Value Trust, started buying housing stocks in late 2005 and 2006, while they were still skidding downhill. In other words, way too early.

I love this quote from his latest quarterly report to investors.

… if you are early enough, that is indistinguishable from being wrong …

Here’s a link to Seeking Alpha, where I read about this.

Reader Comments


September 15, 2007 4:56 AM

Miller will make out well with his builder stocks, as builders re adjust ro the market by building smaller homes that people can actually afford. A drop in land prices and construction materals will allow new homes to be built and sold for what the new emerging RE market will actually bear.

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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