Market Masters: Wall Street's Top Investment Pros Reveal How to Make Money in Both Bull and Bear Markets

289 Pages·2005·9.21 MB·English

by  Kazanjian K.

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MARKET
The
M A S T E R S
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MARKET
The
M A S T E R S
Wall Street’s Top Investment Pros
Reveal How to Make Money
in Both Bull and Bear Markets
K I R K K A Z A N J I A N
John Wiley & Sons,Inc.
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Copyright © 2005 by Literary Productions.All rights reserved.
Published by John Wiley & Sons,Inc.,Hoboken,New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Kazanjian,Kirk.
The market masters :Wall Street’s top investment pros reveal how to make
money in both bull and bear markets / Kirk Kazanjian.
p. cm.
Includes index.
ISBN-13 978-0-471-69865-4 (cloth)
ISBN-10 0-471-69865-2
1. Investment analysis. 2. Investments—United States. 3. Investment
advisors—New York (State)—New York—Interviews. 4. Stockbrokers—New York
(State)—New York—Interviews. 5. Stock exchanges—New York (State)—New
York. I. Title.
HG4529.K387 2005
332.67'8—dc22
2004028128
Printed in the United States of America.
10 9 8 7 6 5 4 3 2 1
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Contents
Introduction vii
PART ONE THE GROWTH GURUS
Manu Daftary, DG Capital Management 3
W.Whitfield Gardner, Gardner Lewis Asset Management 15
Janna Sampson, OakBrook Investments 27
Samuel Stewart,Wasatch Advisors 39
John C.Thompson,Thompson Investment Management 51
PART TWO THE VALUE MASTERS
Robert Lyon, Institutional Capital 65
Andy Pilara, RS Investments 81
Richard Pzena, Pzena Investment Management 93
John Schneider, PEA Capital 107
Susan Suvall,Trust Company of the West 119
PART THREE THE GLOBAL GLOBETROTTERS
Sarah Ketterer, Causeway Capital Management 135
Rudolph-Riad Younes, Julius Baer Investment Management 151
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vi CONTENTS
PART FOUR THE SECTOR SPECIALISTS
David Chan, Jennison Associates 169
Andrew Davis, Davis Advisors 183
David Ellison, FBR Fund Advisors 197
Paul Wick, J.& W.Seligman & Co. 209
PART FIVE THE FIXED-INCOME WIZARDS
Daniel Fuss, Loomis Sayles 225
Margaret Patel, Pioneer Investments 237
PART SIX INVESTING LIKE THE MASTERS
Ten Keys to Beating the Market 255
Glossary of Frequently Used Investment Terms 265
Index 269
About the Author 278
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Introduction
T
here was a time when making money in the stock market looked pretty
easy.For a short period,especially in the late 1990s,it seemed you could
buy just about any company—even one with little operating history, no
profits,and inexperienced management—and make a small fortune liter-
ally overnight.But once the bubble burst,and many of these high-flying
stocks went down to zero,the truth became apparent:Making money in
the market is hard work.True wealth is built over time through disciplined
investing using techniques and strategies that have been proven successful
over the long haul.
While it’s easy to look like a genius when the market goes straight up,
it’s in the more difficult times,such as those we’ve experienced over the
last few years,that the truly great investment pros emerge head and shoul-
ders above the rest of the pack.Without question, managers able to stay
ahead of the crowd in both bull and bear markets are extremely rare.They
have a keen sense of knowing when and what to buy and—just as impor-
tantly—when to sell.They avoid following trends, learn from their mis-
takes, and stick with a winning strategy through thick and thin. Indeed,
these men and women are The Market Masters.
In the pages that follow,you will meet 18 managers who are clearly at
the top of their game.All have trounced the competition over time and
emerged from the recent brutal bear market relatively unscathed.Indeed,
to be crowned a “Master,” each manager must have outperformed both
their peer index and the overall market for at least the last five years pre-
ceding our interview.Most have done it for much longer.
Some managers,including Samuel Stewart,Daniel Fuss,and Andy Pi-
lara,have decades of experience.Others,including David Chan,John C.
Thompson,and Riad Younes,represent the new generation of great Wall
Street investment minds (though each still has worked in the business for
more than 10 years).
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viii INTRODUCTION
The Market Masters takes you one-on-one with all of these gurus to un-
cover their strategies for beating the market in both good and bad times.In
addition to collectively managing tens of billions of dollars for institutions
and other well-heeled investors,all of the Masters run publicly traded mu-
tual funds,which serves a dual purpose.First,it means they have demon-
strated and easily quantifiable track records, so you know their strategies
work.Second,for those who prefer funds over individual stocks,it gives
you a chance to meet some of the industry’s best managers whom you can
actually hire,should you find their philosophy matches up with your own.
As a result, regardless of whether you’re looking for some top-notch
funds to add to your portfolio,or simply want to discover how to select
winning stocks and bonds from some of the leading minds in the business,
you’ll enjoy and profit from every page of The Market Masters.
Each profile follows a similar path.We begin by discussing the manager’s
background and how he or she got into the business.We then move into
the Master’s investment process and uncover the secrets of his or her suc-
cess.The interviews generally wrap up by talking about each expert’s current
observations of the world and the market, along with some of the most
important lessons they’ve learned along the way.
The book is divided into six parts,and features managers who specialize in
a variety of styles and market sectors both in the United States and abroad.In
Part One,you’ll meet five growth gurus—Manu Daftary,Whit Gardner,Janna
Sampson,Sam Stewart,and John C.Thompson—all of whom look for stocks
with growing profitability and earnings using a variety of techniques.
Part Two features five managers built in the mold of value investing
legends Benjamin Graham,David Dodd,and even Warren Buffett.These
experts—Rob Lyon,Andy Pilara,Rich Pzena,John Schneider,and Susan
Suvall—are on the prowl for stocks that Wall Street has put on sale,and
especially like to buy when everyone else wants to sell.
In Part Three, you’ll meet two managers—Sarah Ketterer and Riad
Younes—who invest the bulk of their money in overseas companies.They
not only tell you how they find these stocks,but also why international in-
vesting makes sense for at least part of your overall portfolio.
Part Four will introduce you to four managers who specialize in spe-
cific market sectors. David Chan follows healthcare, Andrew Davis has
made a name for himself investing in real estate investment trusts,David
Ellison is a long-time financial services analyst,and Paul Wick is about the
most seasoned technology manager in the business.
Finally,since many portfolios are comprised of both stocks and bonds,
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INTRODUCTION ix
Part Five features two of the best fixed-income managers on Wall Street
today.Daniel Fuss is widely considered to be the dean of bond investing
(he’s been doing it for more than 45 years),while Margie Patel is clearly
tops in the area of high-yield securities.
While all of the Masters have slightly different ways of choosing their
investments,they do share many traits in common.Part Six sums this up
with a chapter on the “Ten Keys to Beating the Market.”This last section
also includes a helpful glossary of frequently used investment terms,in case
you run across any terminology within the interviews that you’re not fa-
miliar with.
I’d like to personally thank all of the Masters for all of their help in
putting this book together and for being so generous with their time and
knowledge.Thanks also go out to my expert transcriber,Darla McDavid,
who always does excellent work, along with the entire team at John
Wiley & Sons,including Debra Englander,Joan O’Neil,Kim Craven,and
Peter Knapp.
As always,I welcome your comments and feedback about the book.You
can write to me at [email protected].
With that,it’s time to start learning how to make money in the markets
around the world from those who really know how to do it. I’m sure
you’ll find these conversations to be both enlightening and entertaining,
and wish you much success with your future investment endeavors.
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