BID/ASK ILLUSTRATION BY OSCAR BOLTON GREEN
Markets/Finance out he was.” Opportunity Trust bought Amazon.com stock for an average of just above $20 a share. Today it trades for more than $525. When Netflix lost 80 percent of its value in 2011 and 2012, Miller pounced. “It is up more than tenfold in three years,” Mason says. Other bets didn’t pay off. Miller loaded up on shares of Eastman Kodak as it tried to cope with digital photography. The company filed for bankruptcy in 2012. Recently, Miller’s methods have been working again. His $2.5 billion Opportunity Trust has returned 37 percent annually for the past three years, making it the top performer among diversified U.S. equity funds. Yet it still trails 98 percent of similar funds over 10 years and 95 percent over 15, according to Russel Kinnel, director of mutual fund research at Morningstar. “Bill Miller is a smart, aggressive investor,” Kinnel says. “I’m just not sure he always gets sufficient reward for the risks he takes.” In interviews, Miller has said the financial crisis caused him to lose sleep and gain 40 pounds as he wrestled with the consequences of losing so much of his investors’ cash. “It had to affect him,” says Ken Leech, chief investment officer at Legg Mason’s bond unit, Western Asset Management, and a longtime investor in Miller’s funds. “He went from being a rock star to last place. But he stuck it out and hung in there.” Since the recession, Miller has become more sensitive to broad macroeconomic developments, a policy that kept him from investing in Europe during the region’s debt crisis in 2011. The fund also no longer buys hard-to-sell assets such as private equity stakes, says Samantha McLemore, Miller’s co-manager since 2008. Michael Mauboussin, a Credit Suisse executive who’s known Miller for more than 20 years, says he was and still is a smart contrarian investor. The wild swings in his reputation need to be put in perspective: “When things are going well, you are a genius. When they are going badly, you are a dope,” Mauboussin says. “The truth is never as extreme.” —Charles Stein The bottom line Up 37 percent, Miller’s Legg Mason Opportunity Trust is the No. 1 diversified U.S. equity fund for the past three years. Edited by Eric Gelman and Nick Summers Bloomberg.com
Bid/Ask
By Kyle Stock
$2.4b Liberty Interactive clicks on Zulily. Zulily’s 2013 initial public offering started a buying frenzy that mirrored one of the daily flash sales on the e-commerce site, popular with new moms. The company was briefly worth $9 billion. Since then, its model has fallen out of favor, and the owner of the QVC home-shopping service is getting the site—and its choice demographic and recognizable online brand—for a big discount.
$27b $8.9b $1.8b $1.8b $1.5b $1.4b $391m
IndiGo and Airbus come in for a landing. India’s largest airline confirms it will buy as many as 250 jets, which would be the most planes for Airbus in a single deal. Brookfield Asset Management loads up on Asciano. The rail-and-port giant handles nearly half of Australia’s container traffic. Canada’s Brookfield will own 78 percent. Pentair acquires Erico Global. The Ohio-based Erico makes electrical fasteners, which will complement Pentair’s industrial fluid and thermal control systems. BB&T gets National Penn Bancshares. The deal adds 124 mid-Atlantic branches to 240-plus locations BB&T picked up earlier in August by buying Susquehanna Bancshares. Cargill hooks a Norwegian fish-food maker. EWOS’s seven facilities, supplying fish farms worldwide, mark the food titan’s largest bet yet on aquaculture. Greece sells 14 airports to—guess who. Germany’s Fraport will have a 40-year concession. It’s the first privatization to be approved since Greece’s latest bailout. Vroom, vvvrrrooommm! At Monterey Car Week, the auctions’ total trailed last year’s equivalent take of $403 million. Seven of the top 10 sales were Ferraris.
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