Amazon's Darkest Hour: Bill Miller's $500 Million Bet
Bill Miller, the manager of Legg Mason Value Trust, has been hailed as one of the greatest investors in history. In 2000 and 2001, when Amazon's shares plummeted to $6 due to fears of bankruptcy, Miller saw an opportunity rather than a reason to sell. He doubled down on his investment, convinced that Amazon's core business was generating positive free cash flow with minimal inventory risk.
Miller's reasoning was mechanical: he focused on the company's cash flow statement, which showed a strong ability to fund itself. This contrasted sharply with Wall Street analysts who were warning of bankruptcy and advising clients to sell. Miller's conviction was not shaken, even when Bezos turned down his offer of financing between $100 million and $200 million.
Fast forward two decades, and Amazon has returned an astonishing 82,169.55% from October 1, 2001, making it one of the greatest investments in history. Miller's portfolio is now comprised mainly of Amazon shares, with a net worth estimated at around $500 million.