Investment Legend Bill Miller’s Hedge Fund is Half Bitcoin
In December 2017, Investment Magnate Bill Miller said on the WealthTrack podcast with Consuelo Mack that about half of a hedge fund he runs is now invested in bitcoin. This figure is up significantly from October, when he said a third of the $154 million fund was invested in the digital currency. Only five percent of the capital was allocated to the cryptocurrency in 2016.
Miller compares this heavy investment in bitcoin to his stake in Amazon:
“People thought, up until recently, less than three or four years ago, that Amazon was kind of a fake thing, too. Now that’s flipped over, and people now think Amazon is going to kill every company in the country. That is what’s going to happen with bitcoin.”
A World-Famous Investing Record
Miller served as a principle portfolio manager, chairman and chief investment officer of the investment management firm Legg Mason for 35 years. During this era, he is known for managing a fund that beat the S&P 500 (a standard American stock market index) for 15 straight years, up until the recession of the early 2000s.
In August 2016, he founded his own firm called Miller Value Partners, which has less than 20 employees. He now feels liberated to carry out business unencumbered by Legg Mason, saying “they wanted me focused 100 percent on the funds that they wanted to do.” Miller Value Partners manages $2.2 billion altogether.
Betting on Bitcoin
The MVP 1 hedge fund Miller manages that is heavily invested in cryptocurrency is up 72.5 percent this year. A hedge fund pools capital from individuals and institutions into multiple assets. This one consists primarily of family-sourced money along with a few outside investors, The Washington Post reports.
The last time he came this close to a 50 percent investment was in the 90s when he had 20 percent invested in AOL, almost 20 in Dell and 10 in Fannie Mae. He told WealthTrack the firm is looking for avenues to “mitigate risk” and that it plans to stay away from other cryptocurrencies, explaining that based on his knowledge of monetary history, they will all end up “worthless.” One exception is that his son, who is a portfolio manager at the firm, has been pitching him an unspecified upcoming ICO that Bill Miller thinks may be “investable.”
Miller had put one percent of his net worth into bitcoin as of 2014. He bought the digital currency at prices ranging from $200 to more than $500. Bitcoin has risen in value over 1,000 percent in 2017 and as of December 19, the price is at $17,900.