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Bill Miller’s Hedge Fund gained 46% with many attributing the success to the recent surges by Amazon and Bitcoin, as well as strategic investments in other high-performing stocks like Avon Products and ADT.
Bill Miller, the legendary investor is bringing his winning experience to the hedge fund business. According to an investor document published by Bloomberg, Miller’s fund that launched three years ago gained 46% in the first six months of 2019. That is enough to make heads turn in the hedge fund industry.
A while back, we reported that Miller allocated 30% of the hedge fund portfolio in Bitcoins. That investment proved worthwhile with Bitcoin exploding to an all-time high in December 2017. The investor is known to gain success by following the same playbook that he implemented during his 30-year run at Legg Mason. He picked beaten-down securities trading at large discounts to their intrinsic value.
The 46% gain in 2019 is partially attributed to the investments made in Bitcoin. On July 26, Bloomberg reports stated that Miller achieved these profits by investing in BTC among other high-performing stocks. Other investments in Miller’s Hedge Fund include security system firm ADT, Amazon, and Avon Products.
Among Miller’s top positions, Amazon is believed to be undervalued by many even with its double-digit gain this year. ADT plummeted in March on a weaker-than-expected earnings outlook. Bullish wagers on Avon and Bitcoin also resulted in these gains. Miller is a fan of BTC and it reached an 18-month high in June rising past $13,000.
Avon agreed to be acquired in May by Natura Cosmeticos SA and has returned 155% through June 30. According to Bloomberg, Miller’s fund has $126 million in assets. Additionally, the 69-year-old oversees $2.3 billion at his Baltimore-based firm. The fund’s monthly performance has experienced some volatility having surged 39% in June after plunging 29% in May since it uses one to three times leverage on its investments.
Perfect Investment Opportunity
According to Miller, the current environment is positive for stocks. He added in an email:
“With the economy growing modestly, the Fed about to embark on an easing cycle and inflation quiescent, the extreme diversion in valuations between bond proxies such as utilities and consumer staples and cyclical value stocks, is likely to begin reversing. This represents an excellent opportunity for investors to earn excess returns.”
In its short lifespan, Miller’s hedge fund has seen it all rising 182% in 2017 and plunging 34% in 2018 as stocks sank. Miller became famous for beating the S&P 500 for 15 straight years when he managed the Legg Mason Value Trust. In the financial crisis, he ran into trouble losing 55% in 2008 which triggered redemptions.
But, Miller is still dominating the mutual fund world. His $1.5 billion Miller Opportunity Trust is up 18% in 2019 through July 24. Data compiled by Bloomberg shows that the Miller Opportunity Trust has beaten almost 90% of its peers.
Bitcoin Has No Links to Traditional Markets
Miller claimed earlier this year that Bitcoin can potentially have a high value or be worth nothing. He made these allegations considering Bitcoin to be a curious technological experiment. He added that he is not a Bitcoin believer but an observer. Miller said that he added crypto to his portfolio since no obvious correlation exists between the stock market and crypto markets.
On July 25, Galaxy Digital CEO Mike Novogratz said that growing institutional interest will push Bitcoin to highs of $20,000 before 2019 ends.