A New Bitcoin Buyer
In July, CNBC, Business Insider, Forbes and others made backhanded references to Bill Miller’s Miller Value Partners firm buying Bitcoin.
The Forbes contributor article, for example, began with the headline, “The Unreformed Stock Picker: Without a Boss Bill Miller Is Betting on Amazon, Bitcoin, and Bob Dylan.”
For years since the 2008 market crisis, poking fun at Bill Miller has been easy.
This weekend’s Wall Street Journal, on page B5, shows why.
The first paragraph notes Miller “beat the market” for 15 years running while managing Legg Mason’s Value Trust mutual fund.
Then 2008 happened. The fund lost 55%.
The last paragraph notes Miller’s Legg Mason Value Trust put up “horrific results” during the crisis with “big bets on AIG, Eastman Kodak, and Freddie Mac.”
For the record, Bill Miller wasn’t the only one who put up “horrific results” in 2008. Yet he remains a mass media pin cushion.
But let’s keep moving.
The middle of the WSJ piece notes Miller Value Partners, with $2.3 billion in assets, runs a $154 million hedge fund called MVP 1.
MVP 1 has put up 73% returns this year.
How, one wonders?
30% of MVP 1’s total assets are in… Bitcoin!
Miller says the average price MVP 1 paid for its Bitcoin was “about $350.”
Hold on, let’s check the tape this morning: One Bitcoin goes for $6,198.
Miller goes on to say MVP 1 is NOT buying more Bitcoin at today’s prices.
Now here’s where it gets really good.
Miller also says he’s sufficiently intrigued by Bitcoin personally that, if he didn’t already own it, he would be amenable to putting “1% of my liquid net worth in it here.”
He goes on to say, in the investor letter the WSJ quotes, that Bitcoin presently “has a market cap greater than 90% of the companies in the S&P 500.”
You can’t ignore that. Pets.com never got that big.
The takeaway: Bill Miller changed, or at least influenced, what “value investor” means today.
He bought Amazon and AOL, the Journal notes, in the ‘90s because they were cheap and he saw upside.
Now, his “1%” guideline at today’s Bitcoin prices seems downright sage-like.
Of course, someone will likely publish an article in the next few days calling Miller’s enthusiasm the definitive top of the Bitcoin “bubble.”
Just watch. Meanwhile, the party continues. Bitcoin’s up $400 since Friday.
Stepping back, here’s Bitcoin over the last year:
It’s time to ask yourself the big question. What if Bitcoin is not a bubble?
What would that mean? We’ll tackle that, and take a good look at the blockchain side of the question, in an upcoming Rundown.
Turning to the markets this morning…
Market Rundown for Mon., October 30
S&P 500 futures are off 5.25 this morning at 2,573.
Oil’s at $53.94. Gold goes for $1,271. Silver’s at $16.75.
The Russell 2000’s up 10.86 this morning at 1,508.
Japanese stocks have been flying higher all month. The Nikkei opened October at 20,614 and today sits at 22,011.
Talk with you again on Wednesday.
For the Rundown,