Wall Street Folly

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WSJ big losers profile - Legg Mason's Bill Miller: "The thing I didn't do, from Day One, was properly assess the severity of this liquidity crisis"

The Wall Street Journal is profiling some of the biggest losing money managers.  Todays second in the series focus is Legg Mason's Bill Miller, who after 15 years of seemingly being able to do no wrong, these days can't seem to do anything right.

Huge Massachusetts pension fund kicks Legg Mason's Bill Miller and 4 other fund managers to the curb for poor performance

Ouch, that's gotta sting:  Bill Miller's poor recent investment record has caught up with him.  Massachusetts $50.6 billion pension fund fired the legendary Legg Mason manager and managers from four other funds that had responsibility for portfolios of stock totaling $1.8 billion.  The reason: poor performance.  The other firms that were given the boot include Ariel Investments, NWQ, Mazama Capatal Management and Gardner Lewis.  The winner in this deal was State Street Global Advisors, which is now managing around $1.4 billion of the $1.8 billion portfolio.
Massachusetts pension fund fires Legg, 4 others - Reuters

Legg Mason won't be supporting Icahn's Yahoo slate; They're backing the status quo that they believe has "acted with care and diligence" in reviewing Microsoft's offers

The melodrama continues:  According to Reuters, Carl Icahn won't have the backing of Legg Mason's 60.7 million Yahoo shares (4.4% of the stock) in his quest to unseat Yahoo directors. Bill Miller is supporting the incumbants.

"We believe the current board acted with care and diligence when evaluating Microsoft's offers," Legg Mason said in a statement. "We believe the board is independent and focused on value creation for long-term shareholders."

Legg Mason to back Yahoo board slate - Reuters

More pearls of wisdom from the Ira Sohn conference

On Wednesday the annual Ira Sohn conference was held, attended by Wall Street's elite.  Top hedge fund managers talked their books, offering up their favorite (and in some cases, not so favorite) stocks.  Greenlight Capital's David Einhorn offered up his favorite short idea, Lehman Brothers, and that trade is the focus of this morning's Heard on the Street column that we mentioned earlier.  Carl Icahn also spoke, dissing Barack Obama.  Here are some of the other ideas that came out of the conference, as detailed by Reuters:

*Bill Ackman, Pershing Square Capital: Wendy's International, which has agreed to be bought by Nelson Peltz's Triarc Cos, the Arby's restaurants owner. "We own all we can, a share less than the poison pill," said Ackman.

*Michael Price, MFP Investors: buy Allied   Irish Banks but don't buy recent rights offerings by Citigroup or UBS. "Citi's   perpetual preferreds have nowhere to go but down." Price also likes   Vornado Realty Trust, McGraw-Hill Cos and GenCorp Inc  

*Bill Miller, Legg Mason Capital     Capital Management: buy AES Corp, Freddie Mac and Health Net, which he hopes     will merge with Aetna, which the fund also holds.    

*Richard Pzena, Pzena Investment       Management: buy Citigroup Inc . "This is classic value. There is lots       of stress. When we come out of this, the upside is huge."    

FACTBOX: Stock picks from Sohn Investment conference - Reuters