Podcast Summary: Chit Chat Stocks – Bill Miller: Riding Amazon, Bitcoin, and Dell Computer To Investing Greatness

Release Date: January 28, 2026
Hosts: Ryan Henderson and Brett Schafer

Episode Overview

This episode dives deep into the investment philosophy and career of Bill Miller—one of Wall Street’s most idiosyncratic superinvestors. The hosts cover Miller’s impressive track record, distinctive investment style, and defining moments—his legendary value streak, 1990s Dell Computer bet, Amazon conviction, infamous Great Financial Crisis misstep, and ultimately, his remarkable embrace of Bitcoin. The discussion centers around what aspiring investors can learn from Miller’s wins and losses, culminating in key takeaways about his approach to markets.

Key Topics & Discussion Points

1. Bill Miller’s Background and Early Career

• [03:13 – 07:58]
  • Born in 1950, raised in North Carolina and Florida, served as an intelligence officer (1972–75) before pivoting to finance.
  • Started at Legg Mason in 1981, eventually managing the Legg Mason Value Trust (1991).
  • Achieved the unprecedented feat of beating the S&P 500 for 15 consecutive years (1991–2005).
  • Early influences: advised by Peter Lynch; significant bets on financials post–Savings and Loan crisis.

2. Case Study #1: Dell Computer “50-Bagger”

• [07:58 – 16:08]
  • Miller bought Dell in the mid-1990s when it was out of favor, trading at just 5x earnings.
  • Recognized Dell’s negative working capital cycle—customers paid upfront, suppliers paid later, fueling 100%+ return on capital.
  • "Dell was, in his words, the Walmart of the PC industry." (Ryan, 13:10)
  • Turned into a >50x return over four years, exemplifying Miller’s ability to spot overlooked business models.

3. Investing Lessons from Dell & Working Capital

• [16:08 – 18:28]
  • Miller often disregarded GAAP numbers in favor of true cash flows and unique business dynamics.
  • "The faster you grow, the more cash you get in"—a feature lost on many analysts focused only on reported profits. (Brett, 16:41)

4. Case Study #2: The Great Financial Crisis Misstep

• [18:28 – 29:53]
  • Miller’s contrarian nature led to concentrated bets on distressed financials (AIG, Bear Stearns, Freddie Mac) during the 2008 crisis.
  • Initial logic: History of profiting from similar bets (e.g., Fannie Mae in the ’80s, financials after S&L crisis), believing government would support shareholders.
  • Misread: Failed to account for “run on the bank”/liquidity risks and non-economic government response.
  • "[He] doubled down on AIG and Freddie Mac. He dismissed that the government would nationalize the GSEs... wildly incorrect." (Brett, 24:07)
  • Ultimately lost 15 years of market-beating outperformance in just two years.

5. Debating Lessons from the GFC Losses

• [28:43 – 29:53]
  • The hosts wrestle with whether Miller’s strategy is proof of skill or risky luck.
  • Key lesson: Diversify—don’t let one industry or position dominate your portfolio.
  • "No matter how right you think you are, have some level of diversification...pretty staggering to erase 15 years of outperformance in two years." (Ryan, 29:24)

6. Case Study #3: Legendary Amazon Bet

• [30:25 – 41:51]
  • Started buying Amazon in 1999 (dot-com peak), doubled down as it crashed, ultimately built a ~15% stake (second only to Bezos).
  • Saw through GAAP losses; instead, focused on gross profit dollar growth and negative working capital (like Dell).
  • Noted key insight: "Most people try to maximize the number of times they're right. The real question is how much you make when you are right." (Miller, quoted by Ryan, 31:15)
  • "With Amazon...the growth of gross profit dollars had a 95% correlation with Amazon stock price...that's what mattered." (Miller, quoted by Ryan, 36:01)
  • Miller held Amazon for over 26 years; estimates put the return at over 300x since 2002.

7. Critiquing PE Multiples and Conventional Value Analysis

• [39:49 – 41:07]
  • “The PE multiple is the greatest lie investors are told and everyone falls victim a lot of...You can either be misled in a positive way...or by omitting companies.” (Ryan, 39:49)
  • Emphasis on understanding cash generation and future earnings power, not just current valuations.

8. Case Study #4: The Bitcoin Bet

• [41:51 – 49:30]
  • Miller and son started buying Bitcoin personally around $200–$300 (~2015).
  • Used a probabilistic, Kelly Criterion-inspired calculation: If there’s even a tiny chance Bitcoin reaches gold’s market cap, it’s worth a small bet.
  • By 2026, Bitcoin/crypto reportedly makes up a sizable chunk of Miller’s personal wealth.
  • Quote: “Our thought process on Bitcoin is a representative example of our probabilistic value approach. Even though the asset may not hit the radar screens of more traditional value investors...” (Miller, 44:03)
  • Hosts remain skeptical, noting the “circular” nature of crypto analysis.
  • "It feels weird to kind of be doubling down when the forward returns...are so much worse [than in 2015]." (Ryan, 48:49)

9. Miller Value Partners’ Current Portfolio

• [50:34 – 54:28]
  • Now run by Bill Miller IV (son); current positions include Neighbors Industries, Lincoln National, Gray Media.
  • Top positions are deep value, low-PE stocks, unfamiliar to most retail investors.
  • "Most investors tend to be relatively undiversified with respect to these valuation factors...We own low PE and high PE, but we own them for the same reason—we think they are mispriced." (Bill Miller III, quoted by Ryan, 54:10)

Notable Quotes & Memorable Moments

• On Motivation:

  • "He cares more about, quote, winning in markets than the money." – Brett, 05:24

• On Deliberate Contrarianism:

  • "He decided to pass [on] cyclical stocks...and instead invested in several technology companies. Dell Computer was selling at about five times earnings...the negative working capital model…enabled Dell to achieve a 100% return on capital." – Robert Hagstrom, via Ryan, 10:58

• On the GFC Mistake:

  • "He underappreciated that there was major run on the bank risk as well as liquidity risk that could just destroy this company even if the actual earnings [were okay]." – Brett, 23:21

• On Amazon’s True Value:

  • "The only thing that matters is what I think or what [Amazon] actually end up earning in the coming years relative to what you’re paying today." – Ryan, 40:32

• On Diversification and Concentration Risk:

  • "No matter how right you think you are, have some level of diversification. Don't let...industry exposure ...erase 15 years of outperformance in two years." – Ryan, 29:24

• On Factor Diversification:

  • "We construct portfolios by using factor diversification ... We own low PE and high PE, but we own them for the same reason. We think they are mispriced." – Bill Miller III, via Ryan, 54:10

• On Investing Philosophy:

  • "Miller does not care what other investors think about his investments, which allowed him to invest in Amazon when it was the stock that people made fun of for value investors for owning." – Brett, 55:20

Timestamps for Major Segments

| Timestamp | Segment | |-----------|----------------------------------------------------------------------------------| | 03:13 | Bill Miller’s Background, Legg Mason Rise, Early Influences | | 07:58 | Dell Computer Case Study: Recognizing Negative Working Capital | | 16:08 | Interpreting Financials, Dangers of GAAP Myopia | | 18:28 | Great Financial Crisis Misread & Concentration Risk | | 29:53 | Reflection on Diversification, Is Miller Lucky? | | 30:25 | Amazon: Buy, Hold, and Double Down | | 36:01 | Gross Profit Dollars Correlation with Share Price (Amazon) | | 41:51 | Bitcoin: The Probabilistic “Lottery Ticket” | | 50:34 | Reviewing Miller Value Partners’ 2026 Portfolio | | 54:10 | Portfolio Construction: Factor Diversification | | 55:20 | Lessons Learned: First Principles, Don’t Over-Define Style, Avoid Zero Risk Bets |

Final Takeaways: What Can Investors Learn from Bill Miller?

From Brett and Ryan’s Reflection

1. Think from First Principles:

   • Don’t restrict yourself with labels—be willing to buy misunderstood or unpopular assets if they are truly undervalued, regardless of style or consensus.

2. Reframe the Metrics:

   • Go beyond conventional metrics like PE. Focus on business quality, growth in true owner earnings, and unique capital cycle advantages.

3. Diversify with Awareness:

   • Concentrated bets can lead to great wins (Amazon, Dell) but can also be ruinous if misapplied (GFC financials). Avoid positions where total loss is possible.

4. Embrace Factor Agnosticism:

   • Don’t cluster only in low-PE or high-growth; own different types of mispricings. “We own them for the same reason. We think they are mispriced.” (54:10)

5. “How Much You Make When Right” Matters Most:

   • “The real question is how much you make when you are right.” It’s quality, not quantity, of correctness that drives long-term returns.

6. Don’t Let Naysayers Sway You:

   • Don’t be discouraged by those who disagree but haven’t done the work. If your research is sound, conviction is justified.

Episode Tone

The show remains conversational, occasionally self-deprecating, and consistently educational. Brett and Ryan balance admiration for Miller’s originality and boldness with caution about the risks of overconfidence and concentration—offering nuanced insights for anyone striving toward “investing greatness.”