NEW YORK (Reuters) - You know stock picker Bill Miller hasn't lost his touch when his zest for bold investment ideas remains strong and he still holds such Internet icons as Amazon.com, Google and Yahoo.

The investor, famous for outperforming the Standard & Poor's 500 Index for 15 years until the streak ended in 2006, said last week that a broadening of holdings and a paring of the over-sized stakes he favors should reduce volatility.

But his sub-par performance the past two years as manager of the flagship Legg Mason Value Trust fund hasn't killed his zeal for gusty bets that led Miller to load up on Google Inc at its IPO in 2004 when others were scared to do so.

Miller is committed to an investment process that persuaded him to buy stocks others saw with sketchy futures, such as Dell Inc and America Online in the 1990s, Amazon.com Inc earlier this decade and now Yahoo Inc.

Those prescient calls derive from Miller's sharp scrutiny of how a company operates and what makes management tick. In seeking insights that go deeper than his rivals, Miller has made intellectual curiosity a hallmark at Legg Mason Capital Management, a unit of Legg Mason Inc. where he oversees about $70 billion in assets as chief investment officer.

"If there is one thing you can count on is that Bill will be constantly challenging his investment team. He strikes me as a restlessly minded individual," said Bob Boyda, a senior vice president at John Hancock Financial Services who closely follows the mutual fund industry.

Miller's reputation as a big thinker who is willing to delve into ideas that seem to have little to do with investing has given LMCM an image that is closer to that of a wonk house than most other money management firms, LMCM chief investment strategist Michael Mauboussin acknowledges.

Capital Research and Management Co., adviser to the American Funds, also puts great store into out of the box thinking, he said.

The time LMCM allots to the hashing out and reading of topics considered outside the investment realm prompts people to ask, "Does all this stuff make you better investors?" Mauboussin said in a taped message to institutional clients attending LMCM's annual "Thought Leader Forum" last week.

Miller says it does. He cites work by Brian Arthur on the economics of technology and Stuart Kauffman on economic webs as instrumental in understanding an investor misconception in the 1990s that helped form his opinion on Dell and AOL.

Wall Street believed because technology changes rapidly, gaining a long-term take on a company's outlook was impossible. But Miller said he learned that the economics of technology, which refers to market share, doesn't change rapidly. Hence his march into tech shares, a move many questioned at the time.

Miller has stood value investing -- buying stocks that trade at less than their intrinsic value -- on its ear as he hones in on trend-setting companies. Value investors normally shun companies that are often seen as momentum plays.

Miller also has put a lot of thought into decision-making and investing. While his purchase of Dell might have been a great call, he has said its subsequent sale was bad because it was based on the conclusion it looked expensive.

Looking expensive and being expensive are not the same thing, Miller observed.

In fact, Miller likes to keep tabs on emotion during the investment process, asking his money managers to record their state of mind when buying or selling a stock so they can later examine that and to know the mood of their colleagues.

Miller says the traditional value metrics of price to earnings, price to book and cash flow are associated with companies going through cyclical difficulties. He sees value in companies that can earn more than their cost of capital for years, if not decades, and therefore are secularly mispriced.

Yahoo is Miller's holding that he said last week is most likely to replicate in the future the strong performance of Amazon.com, which has more than doubled in price this year.

"Yahoo's current valuation is way out of whack. Yahoo is being punished because Google has eclipsed it in search," Miller said last week at the LMCM conference.

Miller loves price anomalies. Once he has made a decision, he sticks to his guns, buying more shares even if the stock tumbles. Asked once how low he would keep buying, he replied: "As long as it still has a quote."