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ME AND MY MONEY

Former physician has eclectic investment style Add to ...

Mike Serebrennik, 38

Occupation

Full-time investor and entrepreneur

Portfolio

Includes shares in Philip Morris International Inc., Suncor Energy Inc., BP PLC (BP), Groupe Bruxelles Lambert SA, Berkshire Hathaway Inc. and General Dynamics Corp.

The investor

Mike Serebrennik lives in the U.S. He was a physician before becoming a full-time investor and entrepreneur.

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How he invests

“My investment approach is multipronged,” begins Mr. Serebrennik.

One of his strategies is to capitalize on excessive price weakness arising from negative sentiment. “For example, I recently bought BP as it was hounded for spill damages in court,” he says. “My opinion is that the company will eventually get through its legal issues.”

A second strategy is to invest in companies that “opportunistically buy back their own shares.” Studies show they perform well. He also likes the way buybacks increase his percentage ownership of the company.

A third is to generate income through high-yield dividends that are frequently raised. To support the dividend, companies should have good long-term earnings growth and pay less than 60 per cent of profit toward dividends.

Fourth, he has “room in his portfolio for relentless compounders that create shareholder value” without paying a dividend. Berkshire Hathaway is such a company.

Fifth, he invests in companies trading on non-U.S. exchanges because “U.S. investors are simply unaware of these companies, which can create a pricing inefficiency.” Groupe Bruxelles Lambert is a case in point.

He recently added to his position in Philip Morris on price weakness. He believes tobacco use will increase with population growth, especially in emerging markets. The company also buys back shares and grows its dividend every year.

Best move

Buying General Dynamics and other defence companies after U.S. government debt was downgraded in 2011. “Many investors thought that the U.S. government was going to get out of the defence business.”

Worst move

Buying Genco Shipping and Trading Ltd. in 2008 with little due diligence. “I sold at a 90-per-cent loss.”

Advice

“First and foremost, read several investment books in order to learn the basics. Too many people jump into the market with not enough understanding.” More advice is offered at plannedfreedom.com.

Want to share your strategies? E-mail mccolumn@yahoo.com

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