In an investor call last October, fund manager Bill Miller of Miller Value Partners shared market insights and observations.

Here are some highlights:

• “It’s the beliefs and expectations that really drive things rather than the actual fundamentals.”
• The health of the U.S. economy is “outstanding” as evidenced by earnings growth, a still positively-sloped yield curve, solid wage growth, low unemployment and strong corporate profits.
• Looking at earnings and real GDP growth regressed against the long-term history of the U.S. economy—the market would on average be about four years away from the next recession, Miller argued, adding that “if statistics hold, shortest time would be about two years from a recession.”
• “Overall, if you want to put money to work in equities, we think this is an excellent time to do it.”
• The deficit, Miller explained, is growing in a “mostly full employment economy,” adding that nobody knows whether it ultimately becomes problematic. The U.S. dollar, he says, “is a reserve currency, which is very different from economies that don’t have a reserve currency and are reliant on markets to fund deficits.”
• Miller said his firm is more concerned about the impact of the equity market on the growth rate of earnings than it is about tariffs. If the equity market were to dip by 10% or 20%, he argued, that would negatively impact consumer confidence and spending and could hit earnings harder than tariffs would. He added that tariffs have “hit very unevenly” and where they were designed to help U.S. industries, “we haven’t seen that reflected in stock behavior”—citing the example of U.S. steel, which he said was down by 40% since the implementation of tariffs.