Bill Miller - The Stoic
A legend shaped by philosophy and a book on suffering
Bill Miller stands among a few investors that I draw endless inspiration from. His contrarian thinking and fearless approach to investing, amidst challenging markets, are exemplary. The returns speak for themselves, but his endless thirst for knowledge and a broad spectrum of interests are what separates him from the pack.
Today’s post is about Bill Miller the stoic, whose success in life and investing is tightly intertwined with his love for philosophy.
"Stoicism has helped me to stay calm and focused during market volatility, and it has also helped me to make better investment decisions." -Bill Miller
Miller was the manager of Legg Mason Value Trust from 1990 to 2005. During his tenure, the fund outperformed the S&P 500 for 15 consecutive years, which included a big investment into the early days of AOL, which went on to become a huge success. He also took an early stake in Amazon in the late 90s, which he’s held onto for about 25 years.
In 2008 Miller was heavily invested and lost around 65% in the stock market crash. This was a potential career-ending event, but he kept his cool, drew on the principles of stoicism, and bounced back with a stellar comeback.
While being attentive to spotting value in his investing, Miller is not like the average value investor, and this is what I love about him. He has an extreme concentration in his portfolio, including a massive stake in Bitcoin, along with Amazon. He’s all about investing a ton of knowledge into what you own, and that’s why Miller believes concentration is key to success - it helps you zoom in on your focus. This does not come without risk, though, and when I say risk, I’m not talking about your investments crashing 80% (that’s not how we view risk), but instead the risk of putting yourself in a position where you’ll do something stupid.
I suspect Bill Miller was highly aware of this, partly due to his deep roots in stoicism.
"One of the things that stoicism teaches you is to be patient. It teaches you that good things come to those who wait. [..] Another thing that stoicism teaches you is to be disciplined. It teaches you that you need to stick to your investment plan, even when things get tough." - Bill Miller
When we seek out our own investment philosophy, we should have a curious approach to everything in our way, even when dealing with the seemingly most peripheral categories. We never know when we’ll come across principles that our investments can orbit around. In Miller’s case, it’s been stoicism.
Not only is Miller influenced by stoicism, but he says that his investment philosophy is based on the stoic virtues of courage, wisdom, and temperance.
Let’s dig into temperance.
Miller emphasizes the importance of mastering emotional control, asserting that we should not allow our emotions to govern us, but rather take charge of our emotions. However, in order to achieve this, a few stepping stones along the way might be necessary.
"Stoics believe that we should be grateful for what we have and not focus on what we do not have." Miller goes on to say that we should live in the present moment and not dwell on the past or worry about the future. Tie this together with a great deal of patience and discipline, and you’ll be a few steps closer to being able to govern your emotions.
While Miller attributes a lot of his professional success to stoicism, he doesn’t limit its influence to just his job.
"I believe that stoicism is a valuable philosophy for anyone who wants to live a happy and fulfilling life."
Bill Miller has been vocal about his philosophical passion. He’s happily been sharing his wisdom, and when he selflessly does so, he’s embodying another tenant of stoicism that advocates for helping others.
But how else does he go about practicing what he preaches?
He meditates for 30 minutes every day and says that meditation helps him to calm his mind and focus on the present moment. Out of meditation emerges mindfulness, another practice that helps him be more aware of his emotions. He tries to be mindful of his thoughts and feelings throughout the day.
Then there’s gratitude. He says that gratitude helps him to appreciate the good things in his life and to focus on the positive.
But among all these practices, I suspect reading is the most time-consuming of them all.
As we know, Miller will study whatever topic he finds interesting, but I believe a big section in his library is reserved for stoic books. He’ll read the big stoic philosophers, such as Marcus Aurelius, Seneca, and Epictetus, but he’s known for being especially a big fan of one book: "Thoughts of a Philosophical Fighter Pilot" by Jim Stockdale.
“[This book] is one of the most important books I've ever read”
“Thoughts of a Philosophical Fighter Pilot” is a book by Admiral Stockdale, who was a prisoner of war in North Vietnam for seven and a half years. In this book, Stockdale highlights the importance of maintaining hope and optimism in the face of adversity. Miller has said that he was immediately drawn to Stockdale's story of survival and resilience, and that was particularly impressed by Stockdale's ability to stay calm and focused under pressure. Through this book, he’s also learned to focus on the long term and not to worry about short-term fluctuations in the market. Stockdale's principles have helped him make better investment decisions and become both a better investor and a better person.
I draw a lot of inspiration from Bill Miller’s stoic philosophy and framework of thinking. But there’s also another level of encouragement found in the story of this man.
He formed his career in investing around a branch of philosophy and a book about one man’s suffering.
There’s applicable wisdom in the unlikeliest of places.
References:
Book: "The Man Who Beats the S&P" by Janet Low
Book: "Richer, Wiser, Happier" by William Green
Article: "The Bill Miller Story" by The Motley Fool
Podcast: "Acquirers Podcast" with Bill Miller
Podcast: "The Tim Ferriss Show" with Bill Miller