Once-revered Legg Mason fund manager Bill Miller, who has been hit harder than perhaps any high-profile fund manager during the recent market plunge, tells The Wall Street Journal that he was “naïve” in believing that so many prominent companies couldn’t be done in by the credit crisis. “The thing I didn’t do, from Day One, was properly assess the severity of this liquidity crisis,” Miller told the Journal’s Tom Lauricella.

Miller beat the market in a remarkable 15 straight years from 1991-2005, but his Value Trust fund is down 58% over the past year, more than 20 percentage points worse than the S&P 500. Miller’s tendency to put big bets on contrarian picks — which for years earned his clients huge gains — failed him this year as companies whose problems he believed to be overhyped (including Washington Mutual, Citigroup, AIG, and Wachovia) all turned out to be in real distress.

Miller tells the Journal he’s now adjusting his stock screens for a new world in which investors will be more risk-averse for several years. (He’s also re-reading a biography of famed economist John Maynard Keynes, focusing on Keynes experience as a money manager during the 1930s.) Miller says he’s now on the hunt for industry-leading companies with big dividends, and says he thinks there are also opportunities in battered corporate bonds, according to the Journal.