When a Wall Street star flickers and dies

The shit hits the fan. Legg Mason's stock posted its biggest one-day fall in at least 20 years on Thursday after the money manager forecast disappointing quarterly earnings. Breakingviews said the shortfall shows how dependent the Baltimore investment firm remains on its star fund manager, Bill Miller, who is having a bad year. Legg Mason's stock posted its biggest one-day fall in at least 20 years.

Legg Mason’s earnings warning took the market by surprise. Miller’s record of market-beating returns helped Legg’s assets under management soar more than tenfold from just $35bn in 1996. With the acquisition of Citi’s asset management business last year, Legg now manages $890bn, making it one of the planet’s largest asset managers. Even though Miller is only responsible for less than 7% of that, he still remains the firm’s public face. That was terrific for business when Miller was hitting home runs, but this year, his performance has been abysmal. His flagship Legg Mason Value Trust is down 1.7% this year due to poor returns and outflows due to the firm’s ownership change

http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-10-11T192106Z_01_N11184616_RTRIDST_0_FINANCIAL-FUND-LEGGMASON-UPDATE-1.XML&rpc=66&type=qcna