ReverseSignals

Bill Miller is famous for being the only fund manager that has been able to outperform S&P500 for 15 years in a row. He is the Portfolio Manager at Legg Mason Value Trust (LMVTX) and since the beginning until 2008 his fund has earned 15.25% annual average total mutual fund returns. A buy-and-hold investor, Miller invests primarily by purchasing large-capitalization stocks at large discounts to his assessment of their intrinsic value. When valuing companies, Miller looks at the present value of future cash flows. He uses his multi-factor valuation analysis to buy securities priced by the market at significant discounts to their intrinsic value. He keeps his focus more on cash earnings rather than accounting-based valuation measures. 

In a CNBC interview from Oct 20, 2010 he comments that he'd be surprised if the market isn't 20% up within the next 12 months. When asked to compare the current situation with that in 1981 he says it is worse now. It is worse not only because we haven’t had 10 years of no return but also because we’ve had two recessions and the biggest financial collapse and that has shattered people's confidence. The public is not interested in lower prices, he continues, and the lower the prices get the less interested they will be. Miller advises that this is the best time to invest since the early 1980s: “The last 10 years have conditioned people to think short-term and tactically as opposed to long-term; everybody wanted to think long-term in 1999 and that was the wrong time to think long term because things were expensive; now things are cheap and it's time to go back to thinking long term. […] The demographics is an important part of where the market is going to go. [...] I think what you're looking at in the stock market over the next 10 years is real rates of return - somewhere between 6% and 10%. Every time you've had the market down on a ten year basis, the average rate of return has been 50% higher than the long-term historic rate of return.”