January 11, 2011

Beware of the “Unknown Unknowns”

Bill Miller is a well known Mutual Fund Manager for Legg Mason. For 15 straight years his funds beat the S&P
500 index, ranking him as one of the top money managers in the United States. He had an expression: “If it’s in
the press, it’s in the price.” In other words, what is commonly known or anticipated has already been
discounted and factored into the market. So, consensus thinking isn’t much help when it comes to
outperforming the market or more importantly, staying out of trouble. Remember the technology stock bubble
in 2000, the New Economy and the for-sure winners of the future like Nortel?