Bill Miller Again Lags the S&P -- and Himself

How is he doing it?

Miller could not be reached for comment yesterday. Legg Mason said that he was traveling.

But communications boss Mary Athridge explained that the funds pursue "completely different mandates." Value Trust invests in stocks, "and its stated mandate is to purchase securities at large discounts to Miller's assessment of their intrinsic value. He's got a long holding period and low turnover, which means he's willing to be patient."

Opportunity, on the other hand, is completely flexible: Miller is free to invest overseas as well as in the U.S., and in "convertible securities, private placement securities, debt securities, options, etc.," Athridge explains. The fund can also be more heavily concentrated if Miller wants to make a few big bets.

In other words, Opportunity Trust is the equivalent of hiring a tennis pro to take your place in the annual tournament and leaving it up to him to decide what shots to play and how.

Value Trust, on the other hand, is like hiring the pro but telling him he can only play forehand -- from the baseline.

"No volleying! No backhand! No lobs!"

Are you really surprised at the different performance?