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Strategies and Strategists

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In his IA Leader’s Interview in the October 2006 issue of Investment Advisor, Gene Balliett of Balliett Financial Services in Winter Park, Florida, discusses how his approach to investing has shifted since the challenging markets of 2000-2002, and which strategists he respects.

What’s different? My quest for absolute returns and greater reliance on fundamentals. Also, I gained even greater respect for certain strategists and certain strategies. A close friend of mine just may be the last remaining Graham-Dodd disciple. He has read and reread everything Ben Graham wrote and everything written by and about Warren Buffett. He devotes 40 or more hours weekly to old-fashioned fundamental analysis, and he achieves absolute returns. His portfolio has been up in each of the last 16 years and 20 of the last 21. At latest report, he’s up 25% in 2006 YTD. In 2003, he was up 97%.He and his wife could easily convert all of their liquid assets to Treasury securities and live in secure comfort the rest of their lives. But he runs money for fun.

Which strategists do you most like? Besides him, Dave Dreman, Ben Graham, Ron Muhlenkamp, John Neff, Jim O’Shaughnessy, and Marty Zweig. I advise my clients to read everything they can about and by those six. Each of their various ways of investing produced absolute returns in 2000-2005. At latest report, all are up in 2006 YTD.

Do you know any of them personally? Not well. I’ve talked with Dave, Ron, and Jim–the latter two, over lunch at NAPFA conferences. By phone, I invited Dave Dreman to speak at my wife’s 2005 NAPFA South Conference, but he had a prior commitment and asked to be invited another time.

Of the six, which strategist racked up the biggest numbers in 2000-2005? Zweig. No one knows who the greatest investor of all time is; too many definitions are involved with that puzzle. On the 2000-2006 record alone, I’d say the title goes to Zweig. For 1929-2006, Graham is da man.

Do you include the selections of their strategies in your watchlist? Yes. And we share them with our clients, by e-mail and in the client section of

Not William O’Neil? Not anymore. His approach is not perfectly consistent; it lost a very little money in 2004, though not 2002. I do have huge admiration for him, though. He has pushed the quality of investment information to a higher plane.

Got any other favorite investment strategists? Yes. Bart A. DiLiddo, the guy behind VectorVest. Using his extraordinary software, Phil has backtested more than 2,000 investment screens in our search for different ways to obtain double-digit absolute returns. Also, we routinely include a VectorVest research report on each stock when we do a portfolio analysis for a client.

Also, I’m a disciple of John Bajkowski and Wayne A. Thorpe at AAII [American Association of Individual Investors] and their equally impressive software [Stock Investor Pro]. I think any investment manager who aspires to double-digit absolute returns needs to be tuned into It’s a nonprofit. Don’t be fooled by that, nor by its puny $29 annual membership fee.