Legg Mason's chairman Bill Miller has slammed investors for ignoring the advice of ‘Sage of Omaha' Warren Buffett.
In his Q3 commentary for Legg Mason Capital Management, Miller criticises investors who do the opposite of what Buffett suggests, although his market calls are so often correct.
"One of the most remarkable things about the investing world is how (correctly) venerated Warren Buffett is and how completely people ignore his investing advice.
"Since Mr Buffett has made more money than anyone in the history of the planet solely through investing, one would think that when he says quite clearly what to invest in, people would pay attention. I guess they do pay attention, they just do the opposite," he says.
"In 1974, near the bottom of the market, he said stocks were so cheap he felt like an over-sexed guy in a harem.
"In 1999, near the top, he opined stocks would see returns way below those experienced in the bull market up to that time. From the time of his comments in November 1999 to the end of October 2008, stocks fell over 2% per year."
Miller adds in October 2008, Buffett told investors to follow his lead and "buy American," but instead investors sold off the stocks.
Then last month he warned equities were clearly cheaper than bonds, and questioned why anyone would own fixed income.
Miller says: "The result: people pour their money into bond funds in record amounts, and sell their holdings in funds that invest in US stocks.
"Why investors persist in doing the opposite of what the greatest investor of all time does is a greater mystery than the problem of consciousness."
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