[THREAD]
Bill Miller (@B3_MillerValue) is one of this generation's best investors.
There's 3 things we can learn from him:
1. Free cash flow above all else
2. Disregard investment style labels
3. Buy at points of lowest market expectations
Let's go!
macro-ops.com/bill-miller-le…
Bill Miller (@B3_MillerValue) is one of this generation's best investors.
There's 3 things we can learn from him:
1. Free cash flow above all else
2. Disregard investment style labels
3. Buy at points of lowest market expectations
Let's go!
macro-ops.com/bill-miller-le…
1/ FCF Is King
A biz is worth the sum of its future FCFs discounted back to the present.
Miller examines things like:
- LT economic model
- Quality of assets
- Management
- Capital allocation record
He wants to buy >6% FCF yields.
Important: Growth < COC = bad investment
A biz is worth the sum of its future FCFs discounted back to the present.
Miller examines things like:
- LT economic model
- Quality of assets
- Management
- Capital allocation record
He wants to buy >6% FCF yields.
Important: Growth < COC = bad investment
2/ No Labels Investment Approach
The thing I love about Miller the most is his disdain for investment labels.
It's not Growth vs. Value for him. It's paying less than what a biz is worth. Period.
In doing this, Miller avoids investing in value traps because "they're cheap"
The thing I love about Miller the most is his disdain for investment labels.
It's not Growth vs. Value for him. It's paying less than what a biz is worth. Period.
In doing this, Miller avoids investing in value traps because "they're cheap"
3/ Buy At Lowest Expectations
Miller notes one shared trait amongst his best winners: He bought at points of low expectations.
Profits are made on the gap b/w how a company performs and how it's expected to perform.
The wider that gap, the more profits.
h/t @mjmauboussin
Miller notes one shared trait amongst his best winners: He bought at points of low expectations.
Profits are made on the gap b/w how a company performs and how it's expected to perform.
The wider that gap, the more profits.
h/t @mjmauboussin
3a/ Another Point on Expectations
Miller says that a great idea can come from being MORE optimistic about a great biz than market.
Alpha doesn't have to come from buying s**t that turns to diamonds. It can come from higher expectations on a great biz than others.
Think big.
Miller says that a great idea can come from being MORE optimistic about a great biz than market.
Alpha doesn't have to come from buying s**t that turns to diamonds. It can come from higher expectations on a great biz than others.
Think big.
4/ Creating A Bill Miller Strategy
How can we implement this style? Investors can follow Miller's footsteps by:
- Focusing on FCF (now or in future) above all else
- A global style mandate w/out labels
- Paying for those CFs at points of lowest expectations
- LT time horizon
How can we implement this style? Investors can follow Miller's footsteps by:
- Focusing on FCF (now or in future) above all else
- A global style mandate w/out labels
- Paying for those CFs at points of lowest expectations
- LT time horizon
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