Bill Miller, chairman and chief investment officer of Legg Mason Capital Management, a subsidiary of Legg Mason Inc., tells fund shareholders that a new bull market is emerging. Miller expressed his views in his second quarterly report for Legg Mason Value Trust, which was picked up Friday by Jonathan Burton in the Wall Street Journal Fund Track column.

The fund is up nearly 20 percent this year through July 21.

Technology and financial-services stocks, Miller argued, will most likely spearhead the stock market rally. He added that the technology sector in particular, "on average, has a great balance sheet, is flush with cash, and trades at a large discount to the market on a free cash flow yield basis." In addition, Miller said that financial stocks have had a commendable performance during the current rally, similar to the upturn after the banking crises of the late 1980s and early 1990s.

Approximately 55 percent of Value Trust's assets were in technology and financial-services companies as of June 30.

As reported by The MFWire, Miller's Value Trust fund has experienced a standout performance this year, riding the stock market rebound to a considerable comeback in sharp contrast to last year's decline. Value Trust fund lost 55 percent in 2008.

Burton's column on Miller comes a day after the Dow Jones Industrial Average topped 9,000 and recorded its strongest day since November 5 of last year, according to the AFP.

Friday's Fund Track column also briefly touched upon the Financial Industry Regulatory Authority's combined $1.65 million fine on five bank-broker dealers for deficient supervision and procedures in selling variable annuities, mutual funds and unit investment trusts to largely elderly clients. 

Edited by: John Alzate


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