BOSTON (Reuters) - Note to investors: Now may not be the right time to pile into metals, oil or other commodities even as many streak to new highs.

At least that is what veteran stock picker Bill Miller, the only man to have beaten the broader U.S. equities market for each of the last 15 years, writes in his quarterly comment.

Bill Miller of Legg Mason

Miller, who personally invests roughly $23 billion at Baltimore-based money management firm Legg Mason, this week threw cold water on one of the market's hottest trends: commodities.

"It takes a determined optimist to say that now is time to be putting money in commodities," Miller wrote in a sharply worded commentary, adding, "The consensus does tend to be wrong at the turning points, being invariably bullish at the top and bearish at the bottom."

While Miller's Value Trust fund was off 0.84 percent this year and lags the 5.4 percent gain of the benchmark index, according to data from Lipper, he makes a bold argument about what picks to avoid.

For now, however, Miller, who has rewarded investors in that fund with an average yearly gain of 15.5 percent for the last 15 years, may be alone in reminding investors that jumping onto what he calls a long evolving trend may not be a prudent approach.

Newspapers have published stories that commodities prices are likely to keep rising while investment strategists are urging clients to raise their exposure to commodities and consultants are telling pension funds their returns will improve if they own these once unpopular instruments.

And by seeing, for example, that copper, which has an average cost of production of around 90 cents per pound, and a marginal cost of about $1.30 per pound, is now trading near $3.25, even the most cautious person might be persuaded to invest.

But this is where many investors go wrong, Miller said, arguing the time to buy commodities is when they trade for less than what it costs to get them out of the ground.

"The time to own commodities is (or at least has been) when they are down, when everybody has lost money in them, and when they trade below the cost of production. That time is not now," Miller wrote.

It is easy to offer advice after something happens - as when analysts suggested investors put money into cash after the stock market crashed in 1987 or that the high-yield bond market was risky after Enron and WorldCom collapsed, Miller said.

"I can't help but be skeptical of the advice to start or increase a position in commodities AFTER the biggest bull move in 50 years," the stock picker wrote.

Instead of chasing this trend, Miller said investors might fare better by turning their attention back to the U.S. market, which may gain appeal once global liquidity dries up.

"In general, you can get a good sense of what to buy now by looking to see what the worst performing assets or groups were over the past five or six years," he said.

-----------------------------------

Stocks dip on rate woes. Click here.