Is it time to put a muzzle on Bill Miller?

Miller, the Legg Mason fund manager who was among the highest regarded stock pickers until 2006, the first year in a decade and a half that he failed to outperform the S&P 500 Index, is still trying (and failing) to claw his way back to positive territory two years later.

But he's still a long way off. His Legg Mason Value Trust fund lost 20 percent during the first quarter and, although it has reversed some of those losses since the end of March, it still trails the index and its peers by more than 10 percent, according to Morningstar.

And this morning Legg Mason only added to the bloodshed with its fourth-quarter results. It posted its first loss ever as a public company during the March quarter, missing analysts' expectations by nearly a dollar per share.

Investors are fleeing the firm's funds. Customers withdrew $17 billion from Legg Mason equity funds during the March quarter, 60 percent more than the outflows during the December quarter.

But despite the dismal returns, Legg Mason's star manager still manages to create headlines as if investors should listen to him. Miller has been among the most outspoken Yahoo investors during Microsoft's three-month attempt to acquire it.

But his comments are beginning to smack of desperation. And it's not clear that increasing Miller's public relations is the right strategy to improve his investor relations.

In February, Miller said he supported a sale to Microsoft, albeit at a higher price than the $31 per share it offered. And on Sunday, a day after a $33-per-share deal died and Microsoft walked away, a frustrated Miller told the New York Times that he would have considered a $34- or $35-per-share bid. He also implied that Yahoo would be making a big mistake if it didn't initiate a significant share-buyback plan, even though it's far from proven that such a move would benefit existing shareholders like Miller.

Other Yahoo investors, and clients of Legg Mason Capital Management by extension, were obviously not pleased to see Yahoo's shares plummet yesterday. At times it seemed almost like the more the shares fell, the more Miller kept running his mouth to the media.

"I'm more puzzled by Microsoft's not going up to $37 than Yahoo's wanting to walk away,'' he told Bloomberg, adding that he expects Microsoft to come back. "Microsoft needs Yahoo much more than Yahoo needs Microsoft.''

Translation: "Please, please come back, Microsoft."

Miller has reason to plead, although, by all accounts, Microsoft isn't listening. And judging by Legg Mason's outflows, Miller's investors aren't listening to him either. They're still feeling the sting from Miller's wrong calls on Bear Stearns, oil stocks, and Countrywide Financial. The publicity Miller is creating over the failed Yahoo deal can't help ease their jitters.

The Wall Street Journal's Evan Newmark speculated recently about whether Legg Mason will have to cut Miller loose in light of recent events. But, for now, the firm is still standing squarely behind its man.

"Bill Miller is a very smart investor who has been blessed with extended periods of extraordinary performance and has endured extended periods, such as now, where he underperforms," according to statement from a Legg Mason spokesperson. "He is a classic intrinsic long-term value investor whose strategy has consistently worked best at times of market dislocations, where investment returns in some of the more depressed parts of the market offer the best opportunities over a long-term horizon."

Miller may indeed return to his glory days at some point during his long-term horizon, but until then, he might be best advised to stay out of the spotlight and focus instead on picking better stocks. Quietly.