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Superstar Manager Gets Defensive on Amazon.com

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 Amazon.com (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.

Amazon.com'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.