Her Own Way

Larissa Poindexter is the kind of daughter that every elderly parent wishes they had. As if visiting often and keeping an eagle eye on her mother’s care weren’t enough, Poindexter actually built a house right behind her own so that her mother and an elderly aunt could live nearby during their twilight years. Every day after her morning swim, Poindexter pops over to “the neighbors’ house” to make breakfast for three (to come downstairs, her mother and aunt take the specially installed lift), and every night after work, she stops over again to say hello. It’s truly the stuff that many older parents’ dreams are made of.

While Poindexter is nothing if not nurturing–she recently started looking after another unrelated elderly neighbor, too–she’s not the gingham-and-cookies softie you might be expecting. Ensconced in her high-rise office in downtown Houston, Poindexter, 44, means business when she’s at work. She says she left her old firm, Paine Webber, because it didn’t give her the support and flexibility she needed, and when she joined a new firm, Raymond James Financial Services, she did so with specific conditions about the resources she’d need and the independence she’d require. Even when dealing with clients, Poindexter is not the type to suffer fools gladly, and if she thinks you’re wrong, she’ll tell you. Just ask Kirk Weinert.

In the late 1990s, Weinert, a retired attorney and long-time client of Poindexter’s, had an enormous portion of his portfolio invested in a single company that, thus far, had only gone up, up, up. Poindexter wanted him to diversify it, and she said so–bluntly. “I said, ‘Well, your future is on the line. Do you want to be greedy, or do you want to diversify your risk?’”

Put that way, Weinert could hardly say no. So Poindexter sold much of the holding, and thus prevented him from losing significant sums when the company’s fortunes went poof. “It wasn’t what I wanted to hear at the time, because everybody was enjoying the big prosperity, but boy, was she right–exactly right,” says Weinert, noting that his whole portfolio was largely unscathed by the dot-com crash and subsequent bear market. “She’s a straight talker–she doesn’t beat around the bush–and I feel comfortable knowing that she will tell me what she thinks, and why,” he says.

Portfolio Builder

Poindexter’s up-front style is part of the reason Weinert has followed her as she’s changed firms twice, first from Smith Barney to Paine Webber in 1999, and from Paine Webber to Raymond James earlier this year. He also values her independent streak. “I have never felt like I’m being asked to make a decision based on some recommendation that may have come from her firm: it comes from her, and if she doesn’t believe in it, she won’t recommend it.” Indeed, it was the desire for greater independence that pushed Poindexter to set up her own firm at Raymond James, where she would have greater control over her clients’ assets. “I think the final straw was when TCW [Trust Company of the West, a third-party money manager that Paine Webber made available to its brokers] bought Enron–and even I knew not to buy Enron at that time–and then I found out that Ken Lay was on the board of directors of TCW,” she says. “I said, ‘What’s the deal here? Is this based on golf and whisky and cigars, or is it based on a fundamentally good analysis of Enron?’ And since I’m on the hook for my clients’ money, and I have the skills to manage their money, I figured I might as well do it myself.”

That independent spirit served all of Poindexter’s clients well in the bear market of the past few years. Her clients’ investment returns had never led the pack during the market bubble of the 1990s, but when the market climate clouded over, her conservative investing style shined through. In 2001, clients invested in Poindexter’s “equity all-cap core” portfolio lost only 7.4% (net of fees), compared with an 11.5% drop in the Russell 3000. In 2002, the gap was even larger: Clients invested in the “equity all-cap core” portfolio lost an average of 10.1% (net of fees) while the Russell 3000 plummeted 21.5%. At heart a conservative investor, Poindexter is even prouder of the performance of her balanced portfolios: In 2001 and 2002, her taxable balanced portfolio fell -1.1% and -2.2% respectively, while her benchmark (a 60%/40% combination of the Russell 3000 Index and the Lehman Brothers Intermediate Government/Corporate Index) declined -3.2% and -9.6%, net of fees (for more on how Poindexter builds her model portfolios, see The Stock Picker sidebar on page 72). By the time she left Paine Webber, Poindexter was the number-two revenue producer for the Houston Paine Webber office, and she ranked among the top 400 of all of the firm’s approximately 8,000 brokers.

What’s her secret? “You have to be invested in the good stuff, and you have to stick to your investment discipline like Velcro,” says Poindexter. “Buy good companies, and stick with them over the long haul. It’s kind of a plain-vanilla approach, but when you look at how I did in this bad market, it’s pretty impressive.”

A Stock Picker, and Proud of It

Unlike many advisors, Poindexter invests her clients’ money solely in individual stocks, rather than mutual funds. She looks for companies that are rated A- or better by Standard & Poor’s, have little or no debt, and pay regular dividends, preferably dividends that represent only a small portion of net profits. “I like a low payout of net profits in the dividend, because it gives the company room to maneuver when they have a bad year,” she says. “If a company is paying out, say, 17% of their earnings [through dividends] and the business goes through a down cycle, they can still pay their shareholders more money by increasing the percentage to, say, 28%.”

And dividends function as a bellwether for the company’s health, adds Poindexter. “When a company has a history of paying a dividend and then suddenly can’t do it anymore, you should always sit up and take notice of that, no matter what Wall Street says,” she advises. “That’s a tell-tale sign that something’s not right.” Even irregularity in the dividend amounts are worth noting. For instance, Poindexter owned Duke Energy for many years, and until several years ago, the dividend increased every year. When the dividend plateaued for five straight years, she sold the stock at $45 per share. The stock’s shares eventually plummeted to $12.