Course 510: Great Investors: Bill Miller
Constantly Reevaluate Fair Value
In this course
1 Introduction
2 Start with Low Prices
3 Determine Fair Value
4 Constantly Reevaluate Fair Value

Any other value manager would have sold Dell and AOL in 1999, but Miller continued to hold both stocks. That's because he treats a stock's fair value like a moving target that should be reassessed with the ebb and flow of market conditions. Miller held on to Dell and AOL despite their egregious price/earnings multiples because the stock prices were still below the fair value target. Miller buys like a value investor, but he sure doesn't sell like one. While Miller's "value" argument may not jibe with the most conservative of value investors, it does present a convincing argument for the notion that value stocks come in a variety of shapes, sizes--and price multiples.

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