Once upon a time, Bill Miller was a successful fund manager with a healthy net worth. As the manager of the Legg Mason Value Trust, he beat the S&P 500 for 15 straight years. Then the financial crisis of 2008 hit. The financial upheaval wiped out 90% of his net worth. Some people would never be able to recover from such a loss, but Bill Miller isn't a quitter. Today, Bill has built a second fortune and become a billionaire thanks largely to just TWO investments: Amazon and Bitcoin.
A new book by William Green titled "Richer, Wiser, Happier: How the World's Greatest Investors Win in Markets and Life," interviewed Miller. His story is pretty incredible.
Losing A Fortune
In 2008, Bill Miller made a big mistake. In the wake of the spreading financial crisis, Miller placed large leveraged bets on Bear Stearns, Freddie Mac, and other stocks that had been particularly hard hit. His theory was that the Federal Reserve would soon backstop those failing institutions. Miller was wrong and within a fairly short period his flagship fund lost 55% of its value.
His investors abandoned him in droves and he saw the assets he managed fall from a peak of $77 billion to a humbling $800 million.
As if that wasn't bad enough, Miller was going through a divorce at the time and the settlement further decimated his net worth. His wealth shrunk by around 90% in just a few months.
Re-Making A Fortune
Miller had an Ace in his back pocket. He'd been investing in Amazon since shortly after it went public in 1997. He actually raised his stake significantly couple of years later after the dot-com bubble burst. Although he had to sell some shares of Amazon in 2008 just to get by, he also picked up call options on Amazon stock when it also plummeted that year.
In November 2008, Amazon's stock was less than $40 a share (after adjusting for stock splits). As of this writing, shares of Amazon are trading at around $3,200. Miller is potentially the largest individual Amazon shareholder after Jeff Bezos and MacKenzie Scott.
And then there's Bitcoin. Bill reportedly started buying the cryptocurrency when it was around $200 – $300 per coin. His average cost per coin is around $500. As of this writing, a single Bitcoin is $57,000.
According to Miller, today his Bitcoin investment is worth more than his Amazon stake. He is reportedly a billionaire now thanks primarily to these two investments alone. But he could have been even richer!
One regret Miller has though is in letting his GameStop stake go in 2018. Had he held, at the peak of January's madness his former GameStop stake would have been worth $800 million. At today's levels it would have been worth around $200 million.
Miller is a lesson in perseverance. If you fail, get back up and try again.