Bill Miller comments on stock valuations

by Laura Ehrenberg-Chesler on October 15, 2015

in equity market,Investment Strategies

Bill Miller is a well-known value investor and portfolio manager at Legg Mason. He has a very good long term track record and is known for his stock picking ability. In a recent interview with CNBC, he talked about the fact that the environment is good for buying and owning stocks, and that the risk of a melt-up is bigger than that of a sell-off or melt-down.

“If investors started really pulling money out of bonds and putting it into stocks, Miller said, “my concern is the stock market starts going up 20 or 30 percent a year like it did in the late 1990s. And then after two or three years you can’t make money on anything. I’m much more worried about that than the fact that the stock market won’t go up.”

Appearing with Miller, Brian Rogers, chairman and CIO of T. Rowe Price, said there are no real alternatives to investing in stocks, because money markets and treasury bonds are basically delivering no returns.

“There are really a lot of high quality companies selling at good valuations, good dividend yields, [and] not particularly expensive in today’s world,” he said. T. Rowe Price has $773 billion in assets under management.”

Mr. Miller attributes the reluctance of the individual investor to participate fully in the equity markets to a hangover from the 2007-2009 financial crisis. We will be interested to see how long it takes to overcome this sentiment.

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