In a large bowl, cream butter and sugar until light and fluffy. Add eggs, one at a time, beating well after each until light and fluffy. Add wafers to creamed mixture alternately with milk. Fold in coconut and nuts.
Pour into a greased and floured 10-in. tube pan with a removable bottom. Bake at 350° for 1-1/2 hours, testing after 1 hour. Cool on wire rack 15 minutes before removing from pan. Cool completely. If desired, garnish with whipped cream or ice cream.