A highly respected money manager thinks the bear market is finally over.

William H. Miller III, manager of the Legg Mason Value Trust fund, believes that the bear died Oct. 9, marking the end of not only the longest of the postwar bear markets but also the deepest when measured from peak to trough.

In his third-quarter market commentary - dated Oct. 28, but posted on the company's Web site yesterday - Miller wrote that the market decline of recent years "was unique in the amount of value destroyed.

"Over $8 trillion of wealth evaporated from the high in March 2000, representing about 85 percent of current GDP [gross domestic product]. This is roughly equal to that from 1929 to 1932, and much greater than the value destruction in the '73-'74 bear market, which amounted to about 50 percent of GDP."

Legg Mason Value Trust has outperformed the Standard & Poor's 500 index the past 11 years, even though it has lost money the last two years.

In his report, Miller listed a number of reasons to support his conclusion "that better days lie ahead." They include:

Valuations of individual securities reached levels in early October that made investing (if not trading) safe.

Markets have often bottomed in September or October.

At the end of September, only 25 percent of the stocks were trading above their 200-day moving average, typical of bottoms.

Treasury yields are so low as to provide no competition for stocks, or for corporate bonds for that matter.

The Federal Reserve remains accommodative and the money supply has begun to rise, usually a sign that the market will improve.

Companies used September to issue profit warnings, putting further pressure on stocks. Now, as earnings start to be reported, most companies are exceeding lowered expectations, providing a reason for investors to buy.

Since Oct. 9, the S&P; 500 has gained 19 percent while Miller's $9.3 billion fund has risen 31 percent. It is down 13 percent for the year; the S&P; has lost 19 percent.