Legendary investor Bill Miller has doubled the S&P 500 this year thanks to a well-timed Uber trade
- Legendary investor Bill Miller is poised to beat the S&P 500 for a second straight year thanks to a timely options bet on Uber Technologies, Bloomberg reported on Wednesday.
- Miller's $2.2 billion mutual fund is up 36% year-to-date as of Tuesday, more than double the S&P 500's return of 16% including dividends, according to Bloomberg.
- The Miller Opportunity Trust purchased 850,000 shares of Uber in the third quarter, along with options to buy an additional 4.2 million shares of Uber at $32 each through mid-January 2022.
- Visit Business Insider's homepage for more stories.
A massive bet on Uber Technologies will likely help legendary investor Bill Miller trounce the S&P 500 for the second year in a row, according to a Bloomberg report.
The Miller Opportunity Trust, a mutual fund with $2.2 billion in assets, is up 36% year-to-date as of Tuesday, more than double the S&P 500's return of 16% including dividends, according to Bloomberg.
That strong outperformance has in part been driven by a sizable third quarter bet on Uber, just before a key November ballot initiative in California passed that exempted gig-economy companies from classifying all drivers and delivery workers as employees. That change would have increased costs for Uber significantly.
The Miller Opportunity Trust purchased 850,000 shares of Uber in the third quarter, as well as options to buy an additional 4.2 million shares at $32 each through mid-January 2022. The mutual fund purchased the options for $8 per share - the value has since tripled to $24.75 as of early December. Shares of Uber are up more than 50% since the end of October.
According to a Bloomberg interview with the co-manager of the Opportunity Trust, Samantha McLemore, their investment in Uber was driven by their confidence and the performance of Uber CEO Dara Khosrowshahi.
"We think Dara has done a great job on fixing the culture and moving the company toward profitability rather than growth at any cost," McLemore told Bloomberg.
Miller's status as a legendary investor was cemented by his consecutive 15-year outperformance of the S&P 500 through 2005 when he managed the Legg Mason Value Trust.