Bill Miller's Tale: Stocks Aren't Undervalued

Even after two consecutive down years for the S&P 500, the fund world's heavyweight champ just isn't excited about stocks.

Bill Miller, manager of the (LMVTX Quote)Legg Mason Value Trust fund and the only fund manager to top the S&P 500 in each of the past 11 years, filed a decidedly dreary shareholder report with regulators on Tuesday. In his year-end missive, he pronounced stocks "fairly valued" at today's prices and called for companies to offer investors more truth and less spin.

The bargain hunter, named manager of the decade by Morningstar at the end of 1999, called for a solid economic recovery in a year-end press briefing. But his shareholder letter posits that stocks' rebound in the fourth quarter erased many undervalued opportunities. ...