Legg Mason's Bill Miller Makes A Comeback (LM)

For 15 straight years, Bill Miller could do no wrong. During that time period, Miller's Legg Mason Capital Management Value Trust beat the S&P 500 index every single year, a feat which brought Miller considerable notoriety. Starting in 2005, however, Miller's golden touch began to lose its luster. During the three year period between 2005 and 2008 his fund trailed the S&P 500 benchmark, including a disastrous 2008 which resulted in a 55% draw down. This slump, contributed to a 7.5% loss over the last 5 years for investors in Value Trust. According to Morningstar, this lackluster performance put Miller's fund in the bottom 1% of mutual funds for the time period.

2009, however, has been a banner year for Bill Miller and it appears that his extended slump may be behind him. His $4.8 billion fund is up 43% through December 24th as he positioned his portfolio for a big bounce back in equity markets. So what has Miller been betting on to rack up such impressive returns? Ebay Inc, (NASDAQ: EBAY), Amazon (NASDAQ: AMZN), IBM Corp. (NYSE: IBM), and Hewlett Packard Co. (NYSE: HPQ) made up 28% of Value Trust's portfolio at the end of the third quarter. Miller has also been heavily invested in financial stocks such as J.P. Morgan (NYSE: JPM), Aflac Inc. (NYSE: AFL) and Wells Fargo (NYSE: WFC).