How much of a “diversified” index is really just a handful of names? Passive used to feel neutral. Concentration complicates that. On Oct. 27, Bill Miller IV and Dan Lysik are LIVE on what that means for risk, opportunity + portfolio construction. Register: events.zoom.us/ev/Albg0Trvol… #investing

Where are you struggling to get conviction? Dan Lysik and Bill Miller IV are taking questions LIVE Oct. 27. What should we talk about? Register → events.zoom.us/ev/Albg0Trvol…

Index weights reflect market capitalization, not an independent assessment of value. Our bottom-up process begins with the business: its fundamentals, future prospects, and expectations embedded in its stock price. Opportunity emerges when price and our assessment of value materially diverge. #investing

In 2006, Bill Miller described investing as an effort to "narrow the cone of uncertainty" as time horizons extend. The objective is not to eliminate uncertainty, but to identify where an independent assessment of future outcomes differs materially from expectations embedded in market prices.

A company's fundamentals can improve without a corresponding increase in its stock price. Conversely, shares can appreciate without meaningful fundamental improvement. Market prices reflect expectations of future performance, not simply current results. Those expectations can diverge from reality.

When future outcomes cannot be reliably calculated, investment decisions depend partly on convention, confidence, and prevailing market beliefs. Keynes recognized that investors look to one another to form expectations. Those behaviors influence market prices.

"No one has privileged access to the future, a future which involves what Keynes called irreducible uncertainty." — Bill Miller, March 2022 Keynes distinguished uncertainty from measurable risk. Some unknowns can't be resolved with better data or models. The future is genuinely unknowable.

Goldman Sachs CEO David Solomon recently cited "complexity and uncertainty in the world." We looked back through decades of Bill Miller's letters and found nearly 500 passages discussing uncertainty, fear, complexity, etc. Uncertainty isn't a new market condition. It's a persistent one.

Market leadership is broadening beyond mega-cap growth. Through 9/30, Russell Value beat Growth by ~1,200 bps on average across market caps. Cap-weighted and equal-weighted indexes allocate by rules, not valuations. Broader leadership creates more room for individual stock selection.

We don't underwrite baskets. We underwrite businesses. What does it earn? What is it worth? What expectations are already in the price? Where might the market be wrong? And how much should we own given the opportunity + risk? That's bottom-up investing. #investing

The Nasdaq hit a record high on Oct. 5. Yet 243 stocks hit 52-week lows versus just 57 new highs according to Reuters. Some of those businesses face real challenges. Others may be priced for problems that prove temporary. An index can't distinguish between the two. Active stock selection can. #investing

There is no neutral way to weight a portfolio. Cap weight follows size. Equal weight follows a rule. Bottom-up follows the analysis. Different answers to the same question: What deserves your capital? #investing

Earnings, not expanding valuations, are driving 2026 stock gains, according to the Fed's September minutes. But the market doesn't price every business the same way. Some stocks reflect a future of exceptional growth; others reflect expectations of continued weakness. Individual stock selection exposes those differences. #investing

Investors are voting against index concentration with their dollars. Equal-weight index ETFs have attracted significant inflows this year. Makes sense: if you don’t want the biggest companies automatically becoming your biggest positions, change the weighting methodology. But then comes the next question: Is equal weight actually neutral?

How are you thinking about the S&P 500 concentration today? What's your view?

The S&P 500’s top 10 stocks now make up 39% of the index. From 1990–2015, the average was 18–23%. Same data. Very different conclusions: 1. It’s earned. The market leaders deserve their weight. 2. It’s a risk. Diversify into areas with different risk/reward drivers. 3. It’s an allocation decision nobody made. Index investors may own a concentrated exposure they never explicitly chose.

Diversification by number of holdings isn’t the same as diversification by exposure. The top 10% of stocks by size versus the rest of the stocks in the S&P 500 Index is at a historical high. Index exposure has become a tilted bet on the biggest companies. #investing

Oil generates the cash. Capital allocation determines what happens to it. That distinction is central to our investment case for Crescent Energy $CRGY. We think there's more to the story than predicting the next move in oil prices. #Investing

The CRGY investment case increasingly comes down to execution after acquisition. Permian synergy target: $250–$300M, ~3x the original estimate. Captured to date: ~$190M. Meanwhile: higher production guidance, lower cost guidance, unchanged development capital. The assets matter. So does what management does with them. $CRGY Read more: millervaluefunds.com/crescen… #Investing