Maryland Business

All of our newsmaker sessions at The Daily Record have been great, because they allow us to sit down for extended conversations with some of the state’s biggest names in business, law and politics.

The interviews give us a sense of the people behind the titles.

We’ve sat down with Dick Cass, president of the Ravens; Gov. Martin O’Malley; Mayor Stephanie Rawlings-Blake; Phoebe Haddon, dean of the University of Maryland Law School; and Mayo Shattuck, CEO of Constellation Energy Group, just to name a few.

All of our guests have been great, but last week’s session raised the bar. Newsmaker Mark Fetting, CEO and chairman of Baltimore’s Legg Mason Inc., brought us cookies.

And not just any cookies. Deliciously flaky and airy cookies and sweet and gooey macaroons from a local business, the Roland Park Deli and Bakery. Tucked away on the side of the quaint cedar shake Roland Park shopping center (believed to be the first shopping center in the country), the deli’s desserts are divine.

Fetting said he brings a box of the cookies and macaroons into his office every week. We were told to help ourselves, but to leave some for his staff — otherwise he might get booed out of the office.

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If Bill Miller were to channel LL Cool J, he might say to reports touting his rebounding funds: “Don’t call it a comeback, I been here for years.”

That’s because although Miller, Legg Mason’s much ballyhooed stock picker famed for beating the S&P 500 for 15 years in a row, lost a lot last year (55 percent versus a 37 percent loss for the S&P), he’s got the kind of swagger that tells you he knew he’d be back.

Through June 15, Miller is besting the S&P 500 once again. His rise, a 12.1 percent gain versus a 3.6 percent improvement for the S&P over last year, doesn’t exactly make up for last year’s whopping losses, but it’s a start.

Wall Street publications, many of which pummeled Miller last year, are once again taking notice of his picks.

Just don’t call it a comeback.

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He may be down, but he’s not completely out.

Bill Miller, once the famed Legg Mason Inc. value investor who beat the S&P 500 a record 15 times in a row, became infamous for bad investment strategies last year, pouring money into Freddie Mac even after it had lost a bundle.

Miller’s Legg Mason Value Trust finished the year down 55 percent.

But Bloomberg News says don’t count him out just yet.

While Miller lost more client cash than 98 percent of his peers last year on investments in struggling financials,  he’s now beating 68 percent of his rivals with bets on technology firms.

As a value investor, Miller buys shares of companies that are cheapest compared to their earnings and assets. In the past six weeks, companies with the most debt and lowest returns on their assets have turned the biggest rally in that timeframe since 1938, making Miller a winner.

Skeptics say the  gains won’t last for Miller and others — they say six weeks on the stock market is a blip in time, and the economy is far from being stabilized.

For now, though, Bloomberg says Miller is “not dead yet.”

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This has not been a banner year for Bill Miller.

The Legg Mason fund manager famed for beating Standard & Poor’s 500 index for 15 consecutive years (through 2005), has seen serious underperformance in his Legg Mason Value Trust fund.

A fund that once soundly bested the S&P is down 58 percent for the year as of Wednesday, according to Morningstar, compared to a 20.4 percent decline for the S&P.

To make matters worse, media outlets are starting to post their superlative lists of 2008, and Miller has landed with a thud in the “worst” column.

On Tuesday, The Wall Street Journal listed its “Worst Calls of the Year,” noting that in a year when bad calls ran rampant, some had the merit to rise to the top of the list. Bill Miller came in at No. 4 out of 10.

“…the real trouble didn’t begin until this year, when Mr. Miller’s tried-and-true strategy of buying aggressively on the dips backfired. Mr. Miller made big bets on financial shares recovering, and that hasn’t happened — not even close.”

U.S. News & World Report included Miller in an anecdote in its list of “The 10 Worst Assumptions of the Year” under the heading “Things will Bounce Back.” BusinessWeek called Miller one of the “13 Big Losers” of the year.

Miller also received a nod in syndicated columnist Charles Jaffe’s “13th Annual Lump of Coal Awards” for “(Mis)Manager of the Year.”

Things could be looking up for Miller in 2009. Legg Mason announced earlier this month that Miller will manage the Legg Mason Partners All Cap Fund starting in January, but even that good news has come with some heat from the media.

DANIELLE ULMAN, Business Writer

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It’s been a rough week for Baltimore’s Legg Mason Inc.

On Tuesday, Moody’s Investors Services downgraded the firm’s debt ratings; on Thursday, shares of the company’s stock fell 24.75 percent to $19.00 – it’s lowest price point in 9 years.

Things got worse on Friday, when ABC News revealed that a Legg fund has shares in two companies that support the Sudanese government. The reporters dug up the information as part of a probe into potential veep Sarah Palin’s financial disclosures, which showed Palin owns up to $15,000 in Legg Mason International Equities.

“That Fund owns shares in two companies the Genocide Intervention Network labels ‘highest offenders’ because, in that organization’s judgment, they empower the government of Sudan at the expense of the country’s marginalized populations.”

The news is not likely to register on investors’ radar, but it can’t feel good for Legg to get kicked when it’s already down. In fact, the news has been much more slanted toward Palin, who said she would divest from the mutual fund once ABC informed her of its connection to the conflict in Darfur.

Legg ended its day on Friday up 12 cents to $19.12.

DANIELLE ULMAN, Business Writer

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