Seeking Alpha

Bill Miller: Tough finding great values

  • It's very hard to see things you think will be up 50-100% in the next 12-24 months, Bill Miller tells CNBC, finding himself in agreement with Buffett and Icahn about the dearth of great deals in the market today.
  • Legg Mason's famed value man is a big fan of a couple of big cap techs though, calling Apple (AAPL) "The biggest no-brainer in history," and Microsoft (MSFT) an "above ground gold mine that mines cash, not gold."
  • Miller's decades-long hot hand went ice-cold during the financial crisis, but his Legg Mason Opportunity Fund has topped the performance list of diversified U.S. stock mutual funds for the last three quarters.
  • Previous: MIller's bullishness on Apple isn't new news.
Comments (40)
  • Sorry Bill Miller and Carl Icahn. Ashraf, Michael Blair and David Trainer say your wrong, LOL.
    1 Oct 2013, 08:57 AM Reply Like
  • @Jack_Baker - I say Bill is right about MSFT, about AAPL not so much.
    1 Oct 2013, 09:50 PM Reply Like
  • Who are Michael Blair and David Trainer?
    1 Oct 2013, 09:04 AM Reply Like
  • Michael Blair is a penny pincher and he thinks that RIMM will be back roaring like a "bull" and David Trainer thinks he is the Albert Einstein of finance.
    1 Oct 2013, 10:48 AM Reply Like
  • There are STILL lines outside of Apple stores. They sold 9 million iPhones in three days, had 200 million downloads of the new OS in five.


    They are about to report a record year and a record quarter.


    David Trainer and Michael Blair are the guys who see this as obvious evidence that Apple is going out of business.
    1 Oct 2013, 09:18 AM Reply Like
  • "There are STILL lines outside of Apple stores. They sold 9 million iPhones in three days, had 200 million downloads of the new OS in five. "


    Sure, Apple CLAIMED to have sold 9 million phones, but the evidence (you know, what Gene Munster says) indicates they only sold 5 phones, and the other 8,999,995 were just channel fill.


    It makes me laugh that guys like Trainer blatantly accuse Apple of lying about their sales and people still take them seriously.
    1 Oct 2013, 09:25 AM Reply Like
  • Yeah I went to the Apple store and they created a line, why because 2 people were servicing customers slow. Big deal, 9M was based off of wholesale numbers as a large portion.
    1 Oct 2013, 09:32 AM Reply Like
  • And how many people were servicing customers at Best Buy when the Samsung G4 dropped? How long were those lines, LOL.


    The truth is that the daily allotment of new 5s's sells out within two hours of each Apple store opening each day. A new line forms for the next days allotment which sells out quickly each subsequent day. So, your argument that Apple is artificially creating the illusion of demand is completely specious. Oh, what you fandroidians will do to try and sleep at night, lol.
    1 Oct 2013, 09:42 AM Reply Like
  • Yeah its called a marketing gimmick, short supply so they can hype it up and people like you eat it up. Who created Siri & the A5, A6, A7 chips, not Apple sorry.
    1 Oct 2013, 09:51 AM Reply Like
  • Apple designed A7 chips, not some else. iPhone is manufactured by Foxconn, can you say Foxconn created iphone, not Apple?
    1 Oct 2013, 10:11 AM Reply Like
  • yeah apple makes software not hardware lol
    1 Oct 2013, 10:24 AM Reply Like
  • "Yeah its called a marketing gimmick, short supply so they can hype it up and people like you eat it up. "


    Yes, short supply. Only 9 million phones made available. If only other manufacturers could think of clever gimmicks like that.
    1 Oct 2013, 10:44 AM Reply Like
  • w113714:


    I am glad that you went to a Apple store and not Samsung store!
    1 Oct 2013, 10:52 AM Reply Like
  • Apple hasn't changed the way they have counted units sold. Their counting is performed the same way it has in the past so they are comparing "apples to apples".
    1 Oct 2013, 11:32 AM Reply Like
  • Without Apple, Foxconn makes nothing.
    1 Oct 2013, 11:37 AM Reply Like
  • yeah to wholesalers not actually sales genius. If they want to serve the consumer so much why have a line, get them in and out as fast as possible, but they'll get free publicity from news outlets and the web, its marketing 101, free advertising.
    1 Oct 2013, 09:24 PM Reply Like
  • I only saw one Samsung store, I think.
    1 Oct 2013, 09:26 PM Reply Like
  • @Major_Dude - if you are going to refer to me, make it accurate. I have always spoken highly of Apple and its products and never suggested even a remote possibility it would go out of business. I have suggested beginning about this time last year that its stock was over valued. It has dropped from about $700 to $490 since that time.


    David Trainer has done a very good analysis suggesting the returns Apple enjoys are not sustainable long term. He has not suggested the company is going out of business, just that its level of return on investment is more likely to decline than not.


    There is comment and there is rudeness. Your parents probably taught you the difference. Try to remember, it was not that long ago.
    1 Oct 2013, 09:53 PM Reply Like
  • "not sustainable long term."


    Without innovation and/or product category enhancement. Apple will be back and it won't be 15 years like the last time ...
    1 Oct 2013, 10:02 PM Reply Like
  • Michael Blair - a quick search shows that your comments on this website started in late March of 2013, and your first article was in April 2013. AAPL had already broken below $450 at that time. Where were your suggestions posted that AAPL was overvalued at $700? Just wondering.
    2 Oct 2013, 09:33 AM Reply Like
  • @nguyenvanphuoc,


    Tell me where the next line of innovation is going to come from when you just released a product refresh of IPhones. Its not the IPad, Macbook Pro, IMAC. Where is it going to come from. Apple needs to release a blockbuster product every 3-5years. Unlike MS, it justs stamps software and Goog which just generates cash online from its algorithm. Are they going to introduce a TV? It been couple years now and they cant get the content providers on board because they dont have the pull anymore. They arent investing in innovation because that moneys going to shareholders by buybacks and dividends.
    2 Oct 2013, 05:17 PM Reply Like
  • Look, who cares about my manners? I mean, who really cares?


    Why don't you and Trainer just say, "I was wrong. Not just a little wrong. Completely wrong. Apple continues to grow, continues to sell, continues to find legions of high value customers who use their Apple devices to do more and more things. Blockbuster sales, people lined up outside stores, killer reviews - the best products on the market. Boy, did we blow it.?"


    I'm sarcastic. But I'm not wrong.


    You are talking to people who are investing their life savings based on what people like you and I say. Except I'm just commenting - and you're presenting yourself as an expert and getting paid every time somebody reads what you write.


    You can lecture me on manners all you want. But nobody is investing in my manners. And nobody cares what my parents taught me. Because I'm not passing myself off as anybody other than a garden variety investor trying to sort out fact from fiction, hype from common sense.


    Markets fluctuate. Sometimes they behave irrationally - especially for the short term. But over time, companies that build value for customers succeed - and that's what Apple is doing. And has done for most of their existence.


    I sat in meetings 20-odd years ago with senior executives at a very successful technology company who'd brought in a consultant who said, "the market is saturated. There's nothing left by replacement sales."


    Of course, that proved wildly WILDLY inaccurate. As PCs came down in price and became more powerful, the market exploded - hundreds of millions of additional units were sold...and you could easily include the new iPhone 5s in that, since a 64-bit hand held device is much more powerful than the PCs of those days.


    What IS the potential of the mobile computing market when you have extraordinary processing power available in the cloud? And what is the economic value of access to that power through the best OS?


    You and Trainer say "the returns Apple enjoys are not sustainable."


    I don't think you know what you're talking about.
    3 Oct 2013, 10:15 PM Reply Like
  • iOS 7 big fail multiple problems, even innovative biometric fingerprint reader was hacked in one day.
    4 Oct 2013, 12:50 AM Reply Like
  • Trainer is right, you cant have the same returns if you dont innovate. Apple has major competition as Samsung has shown vs MS back in 80s and 90s didnt have much competition. Different story in my view as technology is always changing so fast that Apple once dominated the market but not anymore.
    4 Oct 2013, 12:55 AM Reply Like
  • THANKS Wil:


    Apple dominates now in customer service, reliability and, may I say it, value.
    4 Oct 2013, 01:10 AM Reply Like
  • @samuel,


    funny, you make me laugh, here is an article on how iOS7 flopped big time and not to mention biometric fingerprint reader was hacked in one day, congrads to Apple on that customer service and reliability may I say it value!

    4 Oct 2013, 01:44 AM Reply Like
  • @ Wil:


    I try to be a tech laggard. I thought that the iOS Maps fiasco was a joke. If it doesn't work just revert to G-Maps.


    The anguish, waste of time and lake of progress and other resources using Vista and those PCs is forever in the forefront of my consciousness. Then I bought a refurb HTC Evo 3d and the trouble and the utter waste it has become just reminds me of the superiority of the Apple experience.
    4 Oct 2013, 05:05 AM Reply Like
  • Please, 128GB IPad, IPad mini isnt innovating, Itunes sucked, maps stink, iOS 7. Apple needs product cycles to gain traction


    I just dont see the "Apple experience" as something I need to pay an expensive price for. Its definitely not worth the price. I can do all I need and more on Windows.
    4 Oct 2013, 07:58 AM Reply Like
  • "IPad mini isnt innovating "


    It is creating a new revenue and profit generator for Apple.
    4 Oct 2013, 08:04 AM Reply Like
  • Comon Sam, be realistic now.


    Its called cannibalizing sales by pricing it cheaper. Its not innovating, its just smaller, how is that innovating? You can come out with a 5", 3" ok so what.


    IPad sales have been declining 27% y/y. lol nice innovation. Anyone that has an IPad dont need another one, IPads are just a fad if you have practically the same device. 128GB isnt going to cut it.
    4 Oct 2013, 04:28 PM Reply Like
  • Wil:


    Some of those who post are too focused on practical American purchase habits. That is why I have the IPod touch 4gen and not an IPhone.


    I see foreigners in Cn that have both IPads.
    4 Oct 2013, 06:26 PM Reply Like
  • Facts are IPad sales declining 27% y/y unless people want 2 IPads. IPads are fads, its just a companion device you have next to your laptop.


    Innovating? Samsung and now MS are going to come out with watches before Apple, they are way behind in the game and they dont have any touchscreen laptops of IMacs.
    4 Oct 2013, 11:47 PM Reply Like
  • Icahn,s big buy is just another example of stock and commodities price manipulation.
    1 Oct 2013, 09:33 AM Reply Like
  • Bill Miller said it perfectly...if it was a junk bond, it would be selling for ~$670. Apple is insanely cheap right now. Buy it and wait for Mr. Market's dense brain to figure it out!
    1 Oct 2013, 10:44 AM Reply Like
  • BTW, the Nasdaq 100 is selling for a PE of ~21, so Miller's comments are right on--21 isn't that cheap. Apple would be over $800 at the same PE as the Nasdaq 100 today! If you figure in the effects of the buyback, dividend, and future product growth relative to the market, $1000 is actually quite reasonable. I find it very odd that the companies that sell Apple parts are often valued at twice Apple's value.
    1 Oct 2013, 10:51 AM Reply Like
  • I do not get it, what does the values man from whatever the source what does he mean by saying that Apple is a no-brainer. Does he see value in Apple or he does not. Looks like he sing different tune than in Feb 2013.
    1 Oct 2013, 10:57 AM Reply Like
  • Of course he sees value in Apple. Anyone with even half a brain sees value in Apple.
    1 Oct 2013, 01:10 PM Reply Like
  • @jrez - oddly enough I agree with your comment. Those with complete brains, maybe not as much.
    1 Oct 2013, 09:55 PM Reply Like
  • Hence - get a lobotomy, latest craze in finance circles apparently : )
    2 Oct 2013, 01:36 AM Reply Like
  • People with big brains see value in Bbry though lol.
    2 Oct 2013, 09:37 AM Reply Like
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