| | Fred Kobrick interviewed by Wall St. Journal...
Of the many Wall Streeters commenting about how current affairs will affect the market, Fred Kobrick is one worth listening to. Mr. Kobrick managed money for three decades before he turned over the funds he ran for Kobrick Capital to a corporate partner in 2001.
Since then the aggressive growth investor has studied companies and researched the market without the distractions of marketing and personnel management that running a fund company bring. He's also educated himself on long-held obsessions like international relations, an effort that included a trek to the Middle East two and a half years ago on an interfaith mission with old high-school classmate Peter Lynch.
Mr. Kobrick talked with us about the effect war would have on stocks and the stumbling U.S. economy. He also discussed equity valuations and names he likes, as well as his frustrations with the fund industry.
******************************************
6. If I asked you to run a go-anywhere growth fund today, what would be your top-five picks and why?
I would put [PC/technology vendor] Dell Computer and [chip titan] Intel at the top. They always reinvent themselves. Intel's claim to fame going forward is that they'll be the leader in wireless Internet access through PCs. Dell isn't just a PC company anymore, they're a technology company. I think Dell has the best business model of any technology company I know, maybe along with Microsoft. I'd put Microsoft on this list too. I think Microsoft will be able to obsolete Windows with an even better operating system that will be a knockout.
All of this is done with a three-year time horizon in mind. I don't know what will happen in the near term. No one does. If you asked me this same question six months from now, I might pick five small companies because they do the best in a rising economy. I wouldn't name many now because small companies do the worst in a falling economy.
Today, I would name Tweeter Home Entertainment Group as a good small company that's just been killed because people aren't buying expensive electronics for their homes today. At its top it was trading around $45 and now it's a $5 stock. It's selling with a PEG [price-to-earnings-growth] multiple of less than one. That's the kind of company you buy in pessimistic times like now.
For similar reasons I'd also buy Cheesecake Factory among small companies, and look at other small restaurant companies. [Of these stocks, Mr. Kobrick holds a long position in Dell.]
Write to Ian McDonald at ian.mcdonald@wsj.com
Updated March 20, 2003 3:07 p.m. |
|
