Rufen Sie an +41 (0)43 366 56 68 ·

Bill Miller: That’s the biggest mistake that value investors are making right now

Bill Miller, Fondsmanager

Value investors invest in the stock market on stocks that they think are still traded below their value. However, many investors make a momentous mistake in this strategy, said the famous value investor Bill Miller recently.

to buy

to sell

When the nerves of the bullfighting bullet are gradually getting neater, some value funds often start a risky maneuver: cushioning their growth-stock portfolios to boost performance. A measure with only very short-term effects, because following the bear market, this strategy carries great risks. Such fear is also driving the markets around. This time around, so-called FANG stocks – Facebook, Amazon, Apple, Netflix and Google Mom Alphabet – are at the center of attention. Their rapid growth has more and more often pushed value stocks past in the past, causing investors to invest their money in cheap growth stocks. However, star investor Bill Miller does not consider this the smartest strategy.

Bill Miller: There is a better way than looking for cheap stocks

Bill Miller’s opinion is likely to have much weight among value investors, after all, he has been able to beat the S & P index for 15 years. A feat that so far no active investor could imitate. And in his view, many value investors repeatedly make the same big mistake: They equate “value” with a low stock price. But just because a stock is cheap to buy does not mean it has real value behind it, Miller opened “CNBC.” For his own fund, he himself focuses on companies that focus on high returns on their invested capital and growth of free cash flow, as well as on large market opportunities. On the basis of these considerations, undervalued stocks could easily be distinguished from those that are simply too cheap.

Limits of growth and value are increasingly blurring

The value funds, which are supposed to switch to growth stocks, are, however, in a prominent position. Last but not least, long-standing value star investor Warren Buffett recently invested a staggering $ 46 billion in Apple shares – not value paper in the traditional sense. But Bill Miller also called on CNBC to take a more open stance on value stocks. He himself has recently accessed Facebook shares at a time when the social network data scandal was rocketing and Facebook’s nearly $ 150 worth of bargains. Meanwhile, Facebook shares are again listed at $ 200 on the NASDAQ. This Bill Miller has a full 30 percent profit within a few months.

Ultimately, Bill Miller simply advises all investors to be thorough: “If people buy things that they have not analyzed … that’s unlikely to end well,” the famous value investor is convinced.