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Superstar Manager Gets Defensive on

Legg Mason's Miller swaps e-tailer's stock for its convertible bonds.

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Legg Mason Opportunity (LMOPX) manager Bill Miller, the only active mutual fund jockey to beat the benchmark S&P 500 index in each of the last nine years, is defending (AMZN) in a recent report to shareholders even as he explains steps he took in the second quarter to insulate his fund from the online retailer's recent travails.'s shares, which closed at 38 1/4 Thursday, have lost nearly 50% this year and are down about 66% from their 52-week high of 113 in December. The company's second-quarter revenue missed estimates, and many analysts have turned on the one-time Wall Street darling, questioning its financial strength and promises of profitability.

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Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.