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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (54685)	8/27/2002 11:32:20 AM
From: Dealer	Respond to of 65232

Bill Miller Snaps Up More Tyco, Qwest Saturday August 24, 1:58 pm ET By James Paton NEW YORK (Reuters) - A stock sell-off in recent months put high-profile stock picker Bill Miller in a buying mood, prompting him to scoop up beaten-down shares of Tyco International Ltd. and Qwest Communications International Inc. Miller, known for his contrarian bets, has gained fame for beating the benchmark Standard & Poor's 500 Index (CBOE:^SPX - News) for 11 straight years. But some of his latest picks could put the long winning streak in jeopardy. The fund manager nearly doubled his stake in Tyco (NYSE:TYC - News) in the second quarter, as shares of the troubled conglomerate tumbled. Miller's march into the battered stock began in the first few months of the year, as other investors fled. In addition to boosting his Qwest (NYSE:Q - News) holdings, Miller bought more shares of wireless telephone company Nextel Communications Inc. (NasdaqNM:NXTL - News) and telecom equipment company Lucent Technologies (NYSE:LU - News). He added a new stock, electronic commerce company USA Interactive (NasdaqNM:USAI - News). "The behavior of the average investor has created an opportunity for the enterprising investor to profit, in my opinion," the skipper of the $7.9 billion Legg Mason Value Trust Fund wrote in a shareholder report released on Tuesday. Tyco and Qwest are not Miller's biggest holdings, but bets on those companies -- as well as large positions in Waste Management Inc. (NYSE:WMI - News), Citigroup Inc.(NYSE:C - News) and AOL Time Warner Inc. (NYSE:AOL - News) -- have hurt this year. The fund fell 13.7 percent in the second quarter, and is down about 19 percent since the start of the year. The S&P 500 is down 17.2 percent so far in 2002. "We had a dreadful second calendar quarter," Miller acknowledged. Still, Miller offered an upbeat view of the overall market, citing a growing economy, rising earnings, strong consumer spending and low unemployment. "Anyone who is now selling stocks at multi-year lows in the third year of a bear market after the worst period in 15 years might want to consider whether this is likely to constitute a successful investment strategy," he wrote. Miller is famous for betting courageously on companies that others have abandoned, and in some cases, riding those stocks to big gains. He bought AOL in 1996 after the stock was clobbered amid concerns about the company's accounting and other issues. Tyco is of one of his latest calculated gambles. Facing questions about its accounting and criticism over corporate missteps, Tyco also was dealt a blow with the abrupt exit of Dennis Kozlowski, who resigned as chairman and chief executive just before being indicted on sales-tax evasion charges. At the end of June, Miller's fund owned 24.1 million shares of Tyco, up from 12.9 million at the end of March, according to the report filed with the Securities and Exchange Commission. Qwest is another. The fund has added significantly to that position, too. It owned 36.5 million Qwest shares at the close of the second quarter, compared with 27 million shares three months earlier, the filing showed. Shares of Qwest, the No. 4 local U.S. phone company, have dropped more than 80 percent in 2002. The Denver-based company, which has racked up big losses this year, also has been the target of accounting and criminal probes.