Legg Mason's Bill Miller: Buffett is Wrong About Bitcoin

In an interview on CNBC's popular morning program 'Squawk Box', Legg Mason's Bill Miller dismissed Warren Buffett's statements on bitcoin as flawed.

The former Legg Mason CFA, chairman and CIO, and current portfolio manager for the Legg Mason Capital Management Trust reiterated his support for bitcoin, directly addressing the legendary investor's opinions on the subject in the process.

Buffett has been outspoken in his views about bitcoin as an investment, calling its value a 'mirage' and urging investors to 'stay away’ from the digital currency, though his statements have suggested he sees value in bitcoin's underlying technology.

In contrast, Miller has been open about owning bitcoin and what he sees as its potential to maintain and grow its value long-term.

Now, guest host @billmiller_lmm tells us why he's bullish on #bitcoin #thelastword

— Squawk Box (@SquawkCNBC) April 10, 2014

Overall, Miller was respectful when disagreeing with Buffett, though he suggested that the investor's thinking on the matter was misguided, stating:

Miller's support is also notable considering that he has actually lost money investing in bitcoin, as he reported that his BTC holdings have declined 20% to date.

In his 14th March interview on CNBC, Buffett compared bitcoin to checks or money orders, arguing that since its primary value was as a payment system, the idea that it could be a worthwhile investment was incorrect.

However, notably, Miller took direct aim at these statements on CNBC:

Still, Miller agreed with Buffett on his point that the main benefit of bitcoin was its use as a payment system.

Miller also weighed in on the subject of whether bitcoin could face competition from any of its available alternatives, citing the popular theory of path dependance, which attempts to explain why the first-to-market solution is often the one that becomes most widely used.

Miller listed historical examples of this phenomenon, noting that the most efficient or best ideas don't always win out. Specifically, he cited the fact that "beta was better than VHS", and that "the QWERTY keyboard was not the most efficient way to type".

Explained Miller:

Miller also weighed in on why bitcoin is a preferable investment to gold.

You can buy things with #bitcoin, you can't buy anything with gold these days -@billmiller_lmm to @CNBC

— Squawk Box (@SquawkCNBC) April 10, 2014

Miller has achieved notable successes during his lengthy career at Legg Mason, most recently when overseeing the Legg Mason Opportunity Trust, a fund that focuses on assets with large gaps between price and intrinsic value.

In 2013, the fund was number one in The Wall Street Journal's ranking of diversified US-stock mutual funds with more than $50m in assets for three straight quarters, according to MarketWatch.

Historically, Miller's track record has also been impressive. From 1991 to 2005, the Legg Mason Capital Management Value Trust, which Miller co-managed, achieved the unlikely feat of beating the S&P 500 Index for 15 straight years.

Image via CNBC