Miller Sees More Gains in 2010

Bill Miller — who once beat the market 15 years in a row — has bounced back strong this year after some recent woes. And moving into 2010, he’s sounding quite bullish.

Miller, whose Legg Mason Value Trust is up about 35% this year, said while speaking at the London Stock Exchange that “the outlook in the US for equities is as good as it’s been for some time,” and that 2010 returns of 20% to 25% are “not beyond the realm of possibility”, Global Pensions magazine reports.

The consensus outlook for stocks has been too cautious and conservative lately, Miller said. “I believe that it continues to be that way,” he said. “I think that the next 12 months, the path of least resistance for stocks is higher. … We had a 10-year period where equities, especially large-cap equities have been down. … That’s always been followed by a period of consistently high returns.”

Miller is particularly high on the technology, financial, and consumer discretionary sectors, Global Pensions reports. He likes tech stocks’ balance sheets, and says financials should keep rebounding.

And, he says, “mega-caps” are primed for outperformance in coming years because of growth in emerging markets. “Large multi-nationals who are participating globally will have relatively faster growth than their smaller counterparts,” he says.


  • Brian Jones

    The last 10 years has seen two massive rallies, reaching successive highs and crazy valuations, especially the 2000 top. This doesn’t look like a period where equities have been down.

    And after a crash that has destroyed $14Tn in personal wealth and left most debt intact (according to the Fed Flow of Funds Report), I would be surprised if consumers are going to get back to their freespending ways of 2007 to make consumer discretionary stocks a good buy.

    We haven’t even begun to unravel the credit crash, unemployment is persistently high and banks haven’t begun to resolve the residential and commercial mortgage. Not having to report loan values at mark to market levels does not mean that the problem has gone away.

    Methinks Mr Miller is a trifle optimistic.

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