Admirable Investors

Joe Nocera revisits Bill Miller’s ill-starred bet on Fannie and Freddie:

Does this mean Mr. Miller was always overrated as an investor? I don’t have a good answer to that. I’ve always admired investors with the intestinal fortitude to buy when everyone else is selling.

Actually, yes, Mr Miller was always overrated as an investor. His legendary "streak" was more a function of calendar years than anything else: if you chose just about any date except for January 1 as the measurement date, it disappeared. And while intestinal fortitude is useful for people travelling around Mexico, for me the best investors are the ones who can sleep easily at night.

In any case, the investors I admire aren’t generally the ones who do it for a living. Rather, they’re the normal people with day jobs, who manage to save a little here, a little there, invest it sensibly without getting greedy, and somehow, by the end of their lives, amass a substantial nest egg to pass on to their grateful heirs. For them, people like Bill Miller are nothing more than a distraction: they’d be better off just sticking their money in index funds.

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