Bill Miller trumpeted his signature bets on Amazon stock and bitcoin, diagnosed a new paradigm for investors, and took aim at Warren Buffett’s infamous criticism of cryptocurrencies during a recent episode of the “Richer, Wiser, Happier” podcast.
The founder and investment chief of Miller Value Partners — who keeps 80% of his personal wealth in Amazon and bitcoin — also bemoaned the current market downturn, and underscored the buying opportunities emerging for brave investors.
1. “Since November of last year, the tuition has been very high for me, a very expensive lesson. I should ask President Biden for some student-debt forgiveness here for the tuition payments that I’ve made.” (Miller was joking about what he’s learned from seeing Amazon, bitcoin, and other key holdings plunge in value.)
2. “I’ve gotten margin calls, and that’s painful because you have to sell stuff that you do not want to sell. Then once the things are sold, you also have to pay tax. I don’t like to pay tax any more than the next person does.” (Miller noted his cost base on Amazon stock and bitcoin was effectively zero, so he would have to pay significant taxes on his gains.)
3. “We’re in a regime change. It’s a different investing environment when you have secularly rising interest rates, secularly rising inflation, the Fed tightening, and war in Ukraine.”
4. “When people say, ‘What’s the best investment decision you ever made?’ Buying Amazon in the IPO. ‘What’s the worst ever?’ Selling a share of Amazon.”
5. “We’ve tended to look for things that ideally you wouldn’t have to sell because they’ve hit your valuation target. If that valuation target keeps moving forward at a pretty rapid rate, then that’s great because you can just keep it, as Buffett says, forever. The kind of business he likes to buy and stick in Berkshire Hathaway.”
6. “One of the things that I really like in this market is that you can basically buy public leveraged buyouts. They’ve got a lot of debt on their balance sheet, but that debt is going to disappear over the next several years. The best thing that happened to them is inflation, because the debt is fixed cost, and interest rates are rising, so the value of their debt obligations is falling in real terms.”
7. “Bitcoin is the only economic entity in the world where the supply is unaffected by the demand.” (Miller noted that if the gold price soars, more people will mine gold and supply will increase, whereas there’s a fixed supply of bitcoin.)
8. “I consider bitcoin an insurance policy against financial catastrophe.” (Miller gave the example of a national government privatizing a country’s banks and emptying its citizens’ accounts, and suggested bitcoin would provide an escape from the seizures.)
9. “Buffett said, ‘I wouldn’t give you $25 for all the bitcoins in the world.’ He’s said that bitcoin is a non-productive asset and therefore he can’t value it. Fair enough. If the only thing that you think you can value are productive assets, then no one’s making you buy it, right? So ignore it. The objective of investing is not to own productive assets, the objective is to make money.”
10. “Mike Novogratz got a big Luna tattoo on his arm months ago, with the wolf howling at the moon. It’s like, ‘Whoops, maybe you should have got a bitcoin beaver on your arm, or something a little more enduring.'”
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