Bitcoin, Amazon Is Driving Alpha In Bill Miller’s Investment Strategy As Hedge Fund Gains 46% In H1 2019
Old school investor and a legend in the world of fund management Bill Miller is not someone who you would associate with crypto investing. However, a fund that he had started 3-years ago gained approximately 46% in the first half of 2019. That particular fund had top positions in Amazon, security system firm ADT, beauty company Avon Products and bitcoin.
Miller founded Miller Value Partners in 2016 after a 35-year career at Legg Mason, where he managed a fund that beat the S&P 500 for 15 straight years through 2005. He’s known for concentrated bets, but nothing on the scale of half a fund.
His overall firm manages $2.2 billion, including separate accounts for high net worth individuals and mutual funds. In October 2017, The Wall Street Journal reported that Miller’s fund had nearly a third in bitcoin and about $154 million in assets under management.
Admittingly, Bitcoin alone is not the sole reason the Fund is doing too well. Amazon has had a good year too. However, a majority of the portion of the fund seems to be Bitcoin. The fund hasn’t bought other cryptocurrencies yet, Miller said and plans to stay focused on bitcoin. the fund has been volatile over its short lifespan. It soared 182% in its first full year of trading in 2017 but lost 34% last year as stocks slid.
When asked about the current mood of the stock market and him prevailing in tough times, he said:
“With the economy growing modestly, the Fed about to embark on an easing cycle and inflation quiescent, the extreme diversion in valuations between bond proxies such as utilities and consumer staples and cyclical value stocks, is likely to begin reversing. This represents an excellent opportunity for investors to earn excess returns.”
Congrats to legend Bill Miller @B3_MillerValue and team at Miller Value.
– Bill's hedge fund is up 46% YTD
– Yup, not a typo. 46%!!!!
— Thomas Lee (@fundstrat) July 25, 2019
Even though Miller declined to talk on how much the fund is worth or how it’s doing, it’s expected that the fund incorporates over $126 million in miscellaneous assets. Miller also supervises a different $2.3 billion through a Baltimore-based association.