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To: Jimbo Cobb who wrote (9061)	11/17/1997 11:15:00 AM
From: William Hunt	Read Replies (1) \| Respond to of 97611

TO ALL ---- VERY INTERESTING ----Legg Mason Fund Continues Seven-Year Streak Of Beating S&P By Richard C. ten Wolde NEW YORK (AP-Dow Jones)--Mutual fund manager William H. Miller III sometimes takes his baseball mitt to work. That is another way of saying that he seems to take his work with him everywhere, including the ball park. So while Miller sits at Oriole Park at Camden Yards, hot pretzel in hand and worn old glove nearby - just in case Cal Ripken shanks one his way - his briefcase is available on an adjacent seat. The dedication has paid off. Miller, who manages the $3.7 billion Legg Mason Value Trust, has something of a Ripkenesque streak of his own going: He is on track to beat the Standard & Poor's 500 Stock Index for the seventh year in a row. The charge of the bull market is one reason for the success of Miller's value-oriented approach to large-capitalization companies, but his decision to weight the fund toward the financial and technology sectors is what has provided the edge. So far this year, according to Lipper Analytical Services Inc., the Value Trust is up almost 32% - way ahead of the S&P's 25.7% - despite a slump over the last four weeks that has dragged it down 5.5%. The recent turmoil hasn't shaken Miller's faith in value investing - though he says that money managers who take too simplified an approach to analysis should perhaps be concerned. 'We tend to like dead-money names,' Miller said. Those are companies that not only are out of favor, but seem devoid of a catalyst for future growth. Miller and his analysts seem to be able to pick the ones that are just playing dead: Value Trust - with a 24.84% annualized return - is ranked 20th out of the 1478 funds tracked by Lipper during the last five years. And despite a portfolio that numbers only 50 stocks, Miller is able to maintain an average risk rating from fund-tracker Morningstar, which gives the fund five stars. 'In general, a more concentrated portfolio is riskier,' said Peter Di Teresa, an equity fund analyst with Morningstar Inc. 'However, all things are not equal, and a manager's skill accounts for a lot as to whether it will be a risky investment. Miller has shown he can handle that.' What Miller buys, he holds; the fund has a sloth-like 11% turnover. The fund's Fannie Mae (FNM) stake illustrate how he sticks with a starter that is producing. He bought the government-chartered lender 15 years ago for about $3.50 a share. Today, Fannie Mae, up to $49.38, is one of the fund's top holdings. And, Miller said he doesn't expect to dump it soon: He sees continued growth for the lender, and for other well-diversified finacials. Chase Manhattan Corp. (CMB), another a top holding, accounts for nearly 5% of the funds assets. Banks and technology companies account for more than 50% of the fund's assets. For now, Miller is high on data storage companies, such as Seagate Technology Inc. (SEG), which makes peripheral hardware for personal computers. Though tech stocks were slammed in October, he's been buying shares with inflows. That includes adding to the fund's stake in Compaq Computer Corp. (CPQ). Miller has chosen to triple his position in Compaq this year rather than add to another long-term holding, Dell Computers (DELL) - which has rocketed from the $6 a share he paid to around $77 - because, he said, Compaq's plans to gain market share and improve efficiency seem more promising. Miller also is attracted to another sector that has recently taken a licking: health-care. Despite the recent tumult in the industry, he said, the sector continues to offer excellent values - such as Oxford Health Plan Inc. (OXHP) which hovers around $23 a share after reaching a 52-week high of $89. It lost 62% of its value on Bloody Monday alone. 'We think it's essentially a good sector. It's basically an OK business, and the current pricing is attractive,' Miller said. The market's reaction to Oxford had a psychological element. Still, Miller said the most favorable outlook he can muster for the domestic stock market is that it will stay the same; he doesn't expect the indexes to rise in the near term. 'This turmoil sort of serves as a marker of lower returns. It's a symptom that there will be greater risk in the market,' he said. 'If you're buying stocks, you'd better know what you're doing.' Legg Mason Value Trust requires a minimum initial investment of $1,000, and carries a total expense ratio of 1.77%. BEST WISHES BILL