Success Process - Miller & Keynes - Sobering Historical Accounts of Two Investing Champions
Graeme R. Kirkland, CIM
Senior Investment Advisor - Argosy Securities Inc. - Toronto
Success Process - Miller & Keynes -
Sobering Historical Accounts of Two Investing Champions
I love weekends for various reasons. Along with getting important professional work done that is easier to get done on weekends, than during the week; I read. I love reading, especially on weekends when it tends to be more quiet.
Of course reading the world's best publications on the markets, business and economics - namely The Wall Street Journal and Investors Business Daily (along with some other publications - eg. Barron's, Financial Times, and more) - at least for my appreciation - is standard weekend reading. And that reading was excellent this weekend, as it generally is on weekends.
But this past weekend, I was compelling to again reread my favourite pages of "The Great Minds of Investing" - profiles by William Green, and produced by Hendrik Leber. The chapter on legendary fund manager Bill Miller, has long been my favourite section of this excellent, educational, historically-relevant book.
The book features many winning global asset managers, and of Bill Miller, it states:
"Bill Miller reigned supreme as the undisputed king of mutual fund managers. His flagship fund, Legg Mason Value Trust, famously beat the market for 15 consecutive years through 2005. Morningstar crowned him its Fund Manager of the Decade and Barron's included him in its "All-Century Investment Team." By 2007, Miller was the star of what he made into "a financial powerhouse."
The book goes on to account:
"Then in one catastrophic year, everything came tumbling down..............his flagship fund "plunged 55 percent in 2008"......and another fund he ran "fared even worse, falling 65 percent. Investors fled in droves, and Miller says his assets under management dropped by 90 percent from peak to through."
Obviously, as all truly experience equity investors face from time to time, this phase of Bill Miller's illustrious, extraordinary career, was awful.
The chapter goes on to state:
"Yet what stands out most is Miller's resilience in the face of adversity......Part of what sustained him during that trial by fire was his passion for philosophy....." Miller "revisited the works of stoic philosophers such as Epictetus and Seneca during the credit crisis. He drew strength from their "general approach to misfortune. Basically, you can't control what happens to you. You can control your attitude towards it,"" stated Miller.
Since that rough period of 2007/08, Mr. Miller has recovered incredibly well.
"....Value Trust beat the market over his 30-year tenure and that Opportunity Trust has beaten the market over his 15-year tenure - even including the brutal losses of 2008."
The chapter then concludes with perhaps best chapter of this wonderful book - "The Great Minds of Investing" -
"In any case, Miller is hardly alone. Over the course of a long career, even the most brilliant investors inevitably suffer periods of dire underperformance. Miller quotes one of his favourite lines from John Maynard Keynes, who lost a fortune in the Great Depression yet lived to fight another day:
I should say that it is from time to time the duty of the serious investor to accept the depreciation of his holdings with equanimity." If so, then Bill Miller has done his duty."
Along these same lines, please find enclosed, a past message of mine, from several years ago, but just as relevant to investing success then, as it certainly is, today.
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John Maynard Keynes - Dynamic Great
"I should say that its from time to time the duty of a serious investor to accept the depreciation of his holdings with equanimity."
Iconic British Economist - John Maynard Keynes
John Maynard Keynes was one of the most influential economists of the 20th century. He was also an investor - in stocks, in currencies, and in other asset classes.
He nearly went broke in 1920, and lost a fortune during The Great Depression.
Yet Keynes managed to persistently 'fight another day,' and 'stay in the game,' despite his considerable, and repeated losses.
Keynes concluded 'the golden years' of his life, as a marvelously successful investor.
The life and work of John Maynard Keynes provides a good historical reflection on the dynamics of greatness.
Rarely has great victory emerged from a straight-line.
Graeme R. Kirkland, CIM
Senior Investment Advisor
Argosy Securities Inc. - Toronto
3280 Bloor Street West, Suite 1140
Toronto, ON M8X 2X3
t: 647. 479. 6980
Twitter: KirklandGraeme
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Disclaimer: The views expressed do not necessarily reflect the opinion of Argosy Securities Inc. Neither Argosy nor its affiliates accepts any liability whatsoever for any loss arising from any use of this report or its contents. This does not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. Please consult a professional before making an investment decision.
Forward Looking statements: Certain information set forth in this material contains forward-looking information. Forward Looking Information is subject to risks and uncertainties and is not guarantees of future performance. The information contained herein is based upon what the writer believes to be reasonable; the writer cannot assure that actual results will be consistent. Undue reliance should not be placed on them.
Historical analysis does not reflect future returns; Investing involves risk.
Source: "The Great Minds of Investing" (-profiles by William Green/produced by Hendrik Leber), Graeme R. Kirkland, CIM