Who Is Bill Miller's Equal?

Is Bill Miller like Cal Ripken? At least one magazine thinks so. In a recent article, SmartMoney labeled Miller's streak of beating the S&P 500 "Cal Ripkenesque." The reference is to the former Baltimore Orioles shortstop who broke Lou Gehrig's long-standing record for consecutive games played. In doing so, Ripken--like Miller, whose  Legg Mason Value (LMVTX) has topped the benchmark for 14 consecutive calendar years--gained nationwide acclaim and respect.

Adding a sports angle can liven up a financial story. We've taken that tack in Fund Spy on more than one occasion. But the comparisons have to be accurate to be of any use. How does this one fare? Sadly, it falls short. Actually, that's too kind: It's plain wrong. As a self-appointed guardian of sports references in the financial media (to see what was wrong with a fund company ad focusing on Babe Ruth and Ty Cobb, click here), I'll take a few minutes to explain why--and to identify Miller's true counterpart on the diamond.

Why Ripken's Streak Doesn't Fit the Bill
First off, it's true that both Ripken's and Miller's streaks are impressively long. And both were achieved in Baltimore. But the similarities end there. Ripken's streak consisted simply of playing in the games--not doing anything extraordinary during them. He was a remarkable player, and the streak did involve an element of talent, since only an outstanding player would be allowed by his team to play every single game for more than a decade. But talent or achievement was not what the streak was about. Ripken's feat centered on endurance, dedication, and remaining injury-free, not beating a performance-related benchmark.

Miller's streak is the opposite. His feat isn't about showing up in the office every day. Miller's achievement is consistently beating a benchmark, whether or not he's taken a few sick days and vacations along the way. Another difference: In baseball, the object--winning the pennant or World Series--is a single-season goal, yet Ripken's consecutive-game string didn't become noteworthy until it spanned many seasons. By contrast, Miller's mission is providing solid returns for his shareholders over the long term, and what occurs in any single calendar year is of only passing importance.

In fact, the latter point diminishes the usefulness of most comparisons between sports and investing, as noted in a previous Fund Spy column. But as long as that's understood, there's little harm--and maybe even some value--in exploring for more suitable alternatives to a Ripken/Miller match-up.

A Yankee Legend and a Current Cub
So, having dispensed with "Ripkenesque," let's look further afield. Is there a baseball streak that does resemble Miller's? Joe DiMaggio's comes to mind. In what is likely the most famous streak in all American sports, he got at least one hit in 56 consecutive games in 1941, setting a record that stands to this day. That achievement more closely resembles Miller's streak, for it required a specific performance, not just getting on the field. Ultimately, though, DiMaggio's record also fails the test. For one thing, it took place in just one season, so it doesn't have the long-run dimension of Miller's feat. In fact, I'd be suspicious of, not impressed by, a fund manager who beat the market every single day. In addition, the Yankee star's achievement didn't involve repeatedly topping a widely known benchmark.

But don't despair, financial writers: There is a streak that resembles Miller's. Pitching for the Chicago Cubs and Atlanta Braves, Greg Maddux has won at least 15 games for 17 consecutive seasons. In fact, he's trying to stretch it to 18 seasons almost as we speak--and as with Miller last December, it'll be a close call. Maddux notched his 13th win this past Thursday and has two starts remaining.

Like the Legg Mason fund's, Maddux's streak involves an achievement done each calendar year, over and over and over. And just as important, each year's feat is not in itself astounding. The gold standard for a major-league pitcher is 20 wins; winning 15 is admirable, but nothing more, just as beating the S&P 500 in any one or two years is nice but nothing for a mutual fund manager to write home about. But doing either for three or four straight years begins getting meaningful. Achieving either for 14 or 17 straight years is incredible--and indicates that far more than luck is quite clearly at work.

Even if only Maddux's streak is a true equivalent, all three baseball records actually share something important with Miller's feat: They're entertaining and fun to write about, but ultimately not that critical. Ripken, DiMaggio, and Maddux would all be Hall-of-Fame giants even if they'd missed a few games due to injury, or went hitless in game 30, or had a 14-win season tucked in there somewhere. Same with Miller and Legg Mason Value. If the fund had fallen short of the S&P 500 by a couple of percentage points in one or two years, its shareholders would still be very, very well rewarded, and Miller would still be an investing legend.

Ripken References Running Rampant?
In fact, that's why this item was worth writing about (besides being more fun than writing about 12b-1 fees). Miller's streak gets too much attention as it is; after all, for all the talent it involves, the streak does have an aspect of fluke about it. As Morningstar senior fund analyst Christopher Traulsen noted when Miller notched Year 14 last December, if you examine all year-long periods rather than just those that happen to end on New Year's Eve, you can find plenty in which Miller's fund fell short of the index. Including faulty baseball connections in stories about Miller's streak risks adding confusion to the overemphasis.

Another reason this topic demanded attention: Rogue Ripken references appear to be spreading. Two weeks ago, The Wall Street Journal noted the passing of a longtime Wall Street hand, John Slade, at the age of 97. He had a long and admirable career and spent it all at one firm--there was no mention of a consecutive-days-in-the-office streak, though. Yet the article dubbed him "the Cal Ripken of Wall Street."

This is an alarming trend. The rampant Ripkenization of financial writing must be stopped. I will remain on guard.