Bitcoin, Amazon, and Google are three of the most profitable long-term holdings of legendary value investor Bill Miller, Chairman & CIO of Miller Value Partners. On Consuelo Mack WealthTrack
Interview preview transcript: Bill Miller on Bitcoin
"I am not a Bitcoin evangelist; in fact, I'm not even a Bitcoin believer. I'm a Bitcoin observer and just trying to observe what's going on in that space, trying to understand the technology, understand the supply-demand dynamics, understand how it might fit into a broader monetary system. It struck me as completely worthwhile to have a small position because again, it could become a very large position, which it has done in a hedge fund now."
Odey's Brook Absolute Return Fund was up 10.25% for the third quarter, smashing the MSCI World's total return of 2.47% in sterling. In his third-quarter letter to investors, which was reviewed by ValueWalk, James Hanbury said the quarter's macro environment was not ideal for Brook Asset Management. Despite that, they saw positive contributions and alpha Read More
"But you've decided, and it was at one point it was 50 percent of the hedge fund and you've decided to spin it off, to take a large portion of that Bitcoin and spin it off to the hedge fund investors as a separate fund?"
"Yes, that's what we're going to do, and we'll charge a lower fee than we did. And they can sell it, they can hold it, they can do whatever they want with it. But it presented too great a risk I think to the overall hedge fund if Bitcoin goes down 50 percent this year and it's 50 percent of the fund, there'd be a lot of unhappy people in it. Now if it's spun off to the side, they can make the call if they want it or not."
"And that was another, actually, interesting concept that you had told me in a prior interview. We did a podcast on Bitcoin, which is on wealthtrack.com, several weeks ago. And one of the things that you said is that you should probably have maybe one percent of your net worth in Bitcoin because it doesn't matter if you lose one percent of your net worth, of your liquid net worth."
"Yes. In retrospect, I should have put more than one percent of my net worth in it; so should everybody at one point in time. But if I didn't own it today, I would still probably put at least one percent of my net worth in it because again, if it goes to zero, you only lost one percent. So it's not going to be life-changing. But on the other hand, if it goes from $15,000 to $150,000 or to $300,000, and again, it may go to zero, I don't know. But certainly, the trajectory has been higher over time and again, it's not owned widely. I think there's a massive amount of speculation in the so-called ICOs and the alt coins, which makes very little sense long-term from an economic perspective. But again, there's a lot of speculation and internet names. In 1999 if you owned Amazon at that point in time or eBay or something, you did great, even though they went down when the rest of them crashed and burned."
"And just to finish this Bitcoin part of this interview, is that the context is important that you're still viewing it as it could go to zero. Unlikely, but it could and therefore as an investment, you're putting it in a different category than you are the companies that you own in Miller Opportunity for instance."