Bill Miller famously beat the S&P 500 for 15 straight years as co-founder and portfolio manager at Legg Mason Capital Management.

His returns lately have not been as stellar but his insights into investing are always keenly received.

Miller’s latest missive is a case in point as he advises investors to embrace the uncertainty of the moment, and details the sectors and types of stocks that have the highest probability of success right now.

Here are the hi-lights.


by Bill Miller, CFA, Founder, Chairman, CIO, co-Portfolio Manager, Miller Value Partners

After the strong move in the equity markets last week, attention has turned from guessing how much lower stocks can go to guessing whether the rally can be sustained and by how much?

The important point to keep in mind is both exercises are just guesses:

  • No one has privileged access to the future, a future which involves what Keynes called irreducible uncertainty.
  • No one knows how long the war in Ukraine will last nor what its outcome will be.
  • No one knows how high inflation will go nor when it will begin to subside.
  • No one knows if oil prices will stay over $100 or begin to decline or even double from here.
  • No one knows how many times the Federal Reserve will raise rates nor what impact, if any, reducing its balance sheet will have on the economy.

Where does all that leave us? 

Even after last week’s move, stock prices remain down year-to-date, and I believe there are many good values in the market.

I also believe that a strong US economy with low unemployment, plentiful jobs, rising wages, the strongest real growth in many years, and a Fed that has begun to raise rates makes it likely that a rotation to value stocks from the growth stocks that led the market for the past 10 years has begun. 

Other attractive areas in my opinion are:

  • Energy, whose prices do not reflect oil even in the $70s, much less over $100.
  • Chinese stocks, whose valuations appear too low, particularly when the government is easing and says it wants to help the market.
  • Financials, which mostly benefit from rising rates.
  • Housing stocks, whose valuations in the low-to-mid-single digits do not reflect even a modest continuation of the current fundamentals.
  • Travel related names such as airlines and cruise ships, which should see years of strong demand due to robust consumer balance sheets and a solid economy.
  • Mega-cap tech leaders such as Amazon and Meta are also attractive.
  • Finally, looking at a basket of names down 50% or more from their 52-week highs will likely uncover some long-term bargains.


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