the exchange value of a philosophy degree

[Eubulides <paraconsistent@xxxxxxxxxxx>]

[ is this what William James meant by the 'cash value of being'? :-> ]

http://www.nytimes.com/2004/12/22/business/22legg.html
December 22, 2004
Down to the Wire on a 13-Year Streak for Legg Mason Mutual Fund
By JENNY ANDERSON

Can the mutual fund maverick William H. Miller III beat the S.& P. 500 for
the 14th consecutive year ?

Just weeks ago, the prospects looked dim. But buoyed by activity in some
of his largest holdings, including InterActiveCorp, Tyco International and
Nextel Communications, Mr. Miller may beat the market index once again.

On Aug. 31, Mr. Miller's Legg Mason Value Trust Fund was 4.8 percentage
points behind the Standard & Poor's 500-stock index, according to
Chicago-based Morningstar Inc. By last Monday, that gap had closed to 0.65
percentage point. Then, the news yesterday that InterActiveCorp would spin
off an online travel and retail services company sent that company's stock
soaring, and Mr. Miller moved out ahead of the S.& P. by 1.44 percentage
points.

Mr. Miller, 54, took control of the Value Trust Fund in 1990. He continues
to run that fund along with two others, while serving as chief executive
of Legg Mason Funds Management Inc. The Value Trust Fund has $11.7 billion
in assets under management.

"If you look at the fund more recently, he's really bounced back," said
Christopher Traulsen, a senior analyst at Morningstar Inc., which rates
mutual funds. "That's the trait of a concentrated fund - it can lose
ground rapidly and make it up quite quickly."

Morningstar said it knew of no other fund manager who has beat the S.& P.
500 for 13 years, as Mr. Miller has done. His strategy has been to make
big bets on stocks; his top 10 holdings represent more than 51 percent of
the fund's total holdings. In contrast, mutual fund peers hold only about
35 percent in the top 10 companies. Mr. Miller's level of concentration
means that a major development at one or more of his companies can have a
huge effect on the fund's return.

Mr. Miller's top-10 list includes some companies that have been making
headlines over the last few weeks. His top holding, as of Sept. 30, 2004,
was Nextel Communications, at 7.1 percent of the fund.

That bet paid off handsomely. Sprint announced last week that it intended
to buy Nextel for $35 billion. Nextel shares, which had been trading at
around $21 in mid-August, closed the day yesterday at $30. Another big
holding, Tyco, is up 34 percent for the year.

Mr. Miller's bet on InterActiveCorp paid off yesterday, when Barry Diller,
who controls the company, announced his intention to spin off a business
that will include Expedia, Hotels.com and Hotwire. Shares in
InterActiveCorp, which Mr. Miller has steadfastly insisted were
undervalued, closed the day at $27.41, up 5.9 percent for the day.

Mr. Miller had previously expressed frustration with Mr. Diller's
strategy. At a value-investing conference at Columbia University in
October, he declared that he was ready to take a more activist stance
toward Mr. Diller and the InterActiveCorp board in an effort to get the
company to use some of its huge cash reserves.

According to two people who were at the conference, Mr. Miller said he
wanted Mr. Diller to use cash to buy back shares.

Mr. Miller did not return calls seeking comment.

Mr. Miller has beat the S.& P. index in varying degrees over the past 13
years. In 2000, his portfolio dropped 7.14 percent when the S.& P. 500
dropped 9.10 percent. In 2003, when the market delivered 28.67 percent,
Mr. Miller's picks gained 45.53 percent.

In early November, Mr. Miller was up 5.49 percent for the quarter compared
with the S.& P.'s 4.68 percent return. At the time, according to Mr.
Miller's monthly newsletter, the strongest contributor to portfolio
performance was Google, which was up more than 100 percent from its
initial public offering.

"He's a buy-and-hold investor," said Mr. Traulsen of Morningstar. "He
makes more optimistic assumptions about growth than most value investors
might make because he looks further out into the future."