November 2, 2007

Bill Miller: Financials and Homebuilders Lead the Way

More particularly, just as the right thing to do in 2002 was to buy what everyone was panicked about, I think the greatest gains over the next 5 years will be made in those securities people are panicked about today. For specific names, consult the 52-week new low list."

52 Week low financial? Washington Mutual (WM), Citigroup (C) , Wachovia (WB) , Bank of America (BAC) , Wells Fargo (WFC) Merill Lynch (MER) and every homebuilder.

We have been buying Citigroup, Wachovia and Goldman Sachs since the late summer and financials now make up almost 60% of the portfolio. Like Miller, I am expecting big gains over the next several years out of this group. I also expect some short term pain and hey, no pain no gain, right?

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