Brandon Dewji, 20
Includes shares in Avis Budget Group Inc., USG Corp., American Woodmark Corp., Apollo Global Management, Lithia Motors Inc. and Darden Restaurants Inc.
If investing has its prodigies, Brandon Dewji could be a candidate. He began studying and buying stocks at the age of nine after reading Peter Lynch's books and talking to his father, an investment adviser.
During his teens, he held summer jobs as an equity analyst at Fidelity Investments, Putnam Investments and other firms. Currently, he is an intern at the Canada Pension Plan Investment Board, where he works as a portfolio analyst. In the fall, he'll return to his business studies at York University.
How he invests
"After reading books by Peter Lynch, Seth Klarman, Joel Greenblatt and Ben Graham, among others, my investing style has always been bottom-up, value and growth at a reasonable price," Mr. Dewji says. "That being said, as I learned more about economics and started following investors like Ken Fisher, I began incorporating top-down strategies into my investment ideas."
"The most important thing I have learned from all of my research while working for various firms and doing a tremendous amount of reading is that the market is inefficient. Moreover, it is much easier for small investors to capitalize on opportunities arising from inefficiency."
That's because the inefficiencies are concentrated within the strata of small companies, due to a lack of coverage by brokerage analysts, he says. Also, Mr. Dewji notes that institutional investors aren't interested in the niche because market capitalizations are too tiny to absorb large purchases.
"If you can discover a promising growth story early enough, institutional investors will eventually jump on the bandwagon when the stock becomes investable for them, and you can sit back while the stock propels upward."
He purchased Chipotle Mexican Grill Inc. at $44.18 in November, 2008, and sold it at $335.50 in September, 2011. It was a growth story with "a phenomenal strategy and business model."
He bought Transocean Inc. at $56.23 but ended up selling at $48.61 in November, 2012, after realizing "he underestimated the cost of litigation due to the oil spill in the Gulf of Mexico."
"It is absolutely essential to understand the business models and operations of the companies in which you invest."
Special to The Globe and Mail.
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