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Fund Lessons From Bill Miller

NEW YORK ( -- Last week, I shared a profile of leading growth stock investor, Peter Lynch. Lynch, a former golf caddy, eventually went on to manage one of the best-performing mutual funds of all time. By following a number of personal rules, including know what you own and investing in things that are boring, Lynch helped the Fidelity Magellan Fund (FMAGX) grow from $20 million to $14 billion before he retired.

This week we'll consider a growth investor who has made a significant mark in the investment world during the past several decades. He has his own approach to stock picking and has influenced many of today's most successful and promising fund managers -- including the top guns at Fidelity: Bill Miller.

Soon after Peter Lynch broke millions of investors' hearts by retiring from the mutual fund management game, a man named Bill Miller took over sole management of a struggling fund called Legg Mason Value Trust (LMVTX). That was back in November 1990. He then proceeded to outpace the S&P 500 for 14 straight calendar years -- thrashing Peter Lynch's previous record of seven years.

Many investors know Miller as a value investor -- so what's he doing in a series about great growth investors? Well, for one thing, he bought shares of skyrocketing technology stocks such as AOL (TWX - Get Report) (up 3000% from 1997 to 1999) and Dell (DELL - Get Report) (up more than 1000% during the same period) during the late '90s. And unlike many of the so-called growth investors who piled into those stocks 10 years ago, Miller sold them before the tech bubble burst. What's more, he did so because he understood their business models and prospects better than most of his peers.

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