Andrew Hallam, 40
Berkshire Hathaway Inc., Fastenal Co., Simpson Manufacturing Co. Inc., USG Corp., Wal-Mart Stores Inc., Coca-Cola Co., Pfizer Inc., Johnson & Johnson, iShares DEX Short Term Bond Index ETF and Vanguard Europe Pacific ETF.
Andrew Hallam teaches English at the high-school level. He also writes occasional, but popular, freelance articles for MoneySense Magazine, and maintains a financial blog at andrewhallam.com.
Mr. Hallam likes to invest in well-run, low-debt businesses with high rates of return on total capital. "The businesses also need to have what Warren Buffett calls 'Economic Goodwill,' or a durable brand name that people trust and often think is synonymous with the product they sell," he adds.
He is prepared to wait for a decent price to buy shares in a company. "I can ignore the stock market for long periods of time when there's positive sentiment about stocks and rising prices," he says.
While he is waiting, he'll park savings in short-term bond positions. "When stock markets rise, I actually get a bit depressed. But when they fall, I get really excited," Mr. Hallam declares.
He sold bonds and bought stocks during the bear market of 2008-09, and shifted to buying bonds from September, 2009, to May, 2010, because stock prices weren't attractive to him then. Recently, with the market's decline since April, he has started selling some bonds to buy stocks.
Two recent stock picks were Johnson & Johnson and Coca-Cola. Besides having high rates of return on capital and other positive attributes, they both have great records for growing sales and earnings. Currently, much of this growth is coming from expansion into the developing world.
"It was USG Corp. [a wallboard manufacturer hit by asbestos lawsuits]at $4.35 per share in 2003. I sold it at $35 a few years later and bought it back at $9 last year."
"I'm the only person I know who sold Nortel Networks at $118 per share. But it rose to $124 shortly after and I read an analyst's report suggesting that it was going to $140. So like a fool, I bought it back when it dipped to $120."
"Don't listen to any financial adviser who suggests that you buy actively managed mutual funds. Over all, a portfolio of actively managed funds stands virtually no chance of beating a broad-based index fund."
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