Bill Miller on Bull Markets and Risk

The problem is that real risk and perceived risk are two different things. And that’s where people get into trouble, because they perceive risk to be high when prices are low, and they perceive risk to be low when prices are high. That’s the psychological problem that most people have.

I’m always much happier when stocks are trading at their 52-week lows than I am at 52-week highs. It’s simple: If you have a valuation discipline, then you know that stock prices change more rapidly than business value.

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