Ah, the irony. Bill Miller, the legendary mutual fund manager, is mystified that so many investors ignore the advice of Warren Buffett. Yet in some respects, so does Miller.
For example, one of Buffett's investing principles involves staying within his circle of competence. On computer-related businesses, the Oracle once said, "I don't know what that world will look like in 10 years, and I don't want to play in a game where the other guy has an advantage over me."
Miller may have a knowledge advantage over Buffett in the tech sector, but even he doesn't know what that world will look like in 10 years. Yet he's invested in companies such as eBay and DirecTV
Miller has also stated that the market could gain 15% in the coming year. More than 30 years ago, Buffett said, "[S]uccessfully forecasting short term stock price movements is something we think neither we nor anyone else can do."
They're not so different
Still, both Miller and Buffett have favored insurance and other financial companies. Miller owns shares of Citigroup
Both Miller and Buffett also seek bargains, though they may define them differently. Miller scooped up shares of offshore drilling specialist Transocean
In addition, both like to bet big. Miller has more than 7% of his Legg Mason Value Trust (LMVTX) fund in the power company AES
Both Miller and Buffett have achieved great success. But now that Miller's legendary S&P 500-beating streak has ended, Buffett's approach has helped him hang on to more of his money. Miller might have avoided some losses by following Buffett more closely, but he'd also have missed out on some of his biggest winners.
We can learn a lot from both money managers.
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Longtime Fool contributor Selena Maranjian owns shares of eBay and General Electric. Motley Fool Options has recommended a bull call spread position on eBay, which is a Motley Fool Stock Advisor pick. The Fool owns shares of Transocean. Try any of our investing newsletter services free for 30 days. The Motley Fool is Fools writing for Fools.