Legendary Fund Manager Bill Miller Sees Good Times Ahead
Ben Baden

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Legendary mutual fund manager, Bill Miller, perhaps best known for his 15-year streak of consecutively beating the S&P 500, sees better times ahead. (After the historic run ran out in 2006 for Legg Mason Value Trust, (symbol LMVTX), it spent several years in the bottom of its category, but rebounded strongly in 2009.) In a Q&A with Kiplinger's Personal Finance, Miller says he believes the United States will see 3 percent GDP growth in 2011. He's bullish on the stock market. "Now there's only one thing worth buying, and it's stocks," he says. Financials are among his favorite sectors, which also include healthcare and technology. He favors big banks like Goldman Sachs and Bank of America, and says financials are "the most under-owned sector in the market."

Miller is currently making a big bet on airline companies. United Continental and Delta are two of the largest holdings in his Legg Mason Opportunity Trust (LMOPX) fund. He says it's "perhaps the worst industry in the history of the world," but he's invested in airlines because they will have their first profitable fourth quarter in more than 10 years.

Kiplinger: Bill Miller Sees Better Times Ahead

Check out Minyanville's running list of concerns that investors have. This week's list of 17 worries includes QE2, currencies, the American economy, and China. As for the PIIGS countries--Portgual, Ireland, Italy, Greece, and Spain--Minyanville says, "FYI: News of their demise has been greatly ... delayed." Money manager Lloyd Khaner, who makes the list, says he does so "because when Mr. Market gets nervous, stocks tend to get cheaper."

Minyanville: The 17 Things Worrying Investors Right Now

Many asset classes such as stocks and commodities have seen huge rallies, partly due to the Fed's announcement that it will inject another $600 billion into the bond market by buying up long-term treasury bonds. How will this affect your money? A recent U.S. News post explains how the markets have performed lately, and where they could potentially be headed in the future.

There are concerns that a huge buyer in the bond market, like the Fed, could have huge implications for the way the markets perform over the coming months, and there are even worries that the Fed's move could have unintended consequences. Some experts say commodities and emerging markets stocks could be near their peaks. Emerging markets stock funds have seen inflows of $21 billion from the first of the year through the end of October, while other stock funds have seen huge outflows. Quincy Krosby, chief market strategist at Prudential Financial, suggests that investors ease back into U.S. stocks. There are a number of multinational corporations like Wal-Mart and Coca-Cola that do a great deal of business in emerging markets countries. By buying stocks like these, Krosby says investors can take advantage of some of the emerging markets' growth without investing in the region directly.

[For more investing insights, visit our Successful Investing section.]

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What Investors Really Want: Know What Drives Investor Behavior and Make Smarter Financial Decisions