| Bill Miller of Legg Mason released the Value Trust Letter to Shareholders on Friday. The letter discusses some very interesting factors Bill has observed about the economy. At the end, he comments on how financial stocks, namely those tied to housing, are being driven by emotion, fear and relief rather than rational analysis. His case in point is Countrywide (CFC) which Miller values at $40/share. From the letter: "The recent precipitous decline in financial stocks, especially those related to housing, which sent Countrywide Financial (CFC) to $12 last week, and led to 20 to 30% drops in financial guarantors in a day or so -- after they had already dropped between 25 and 50% this year -- is a case in point. After falling 20% in a only a few days on no news, and this after being down 50% for the year, CFC rallied over 30% in one day once they reported their results and indicated they would be profitable for the 4th quarter and expect to earn a reasonable return on equity of 10-15% for a |
