• Revenue Cycle Management
  • COVID-19
  • Reimbursement
  • Diabetes Awareness Month
  • Risk Management
  • Patient Retention
  • Staffing
  • Medical Economics® 100th Anniversary
  • Coding and documentation
  • Business of Endocrinology
  • Telehealth
  • Physicians Financial News
  • Cybersecurity
  • Cardiovascular Clinical Consult
  • Locum Tenens, brought to you by LocumLife®
  • Weight Management
  • Business of Women's Health
  • Practice Efficiency
  • Finance and Wealth
  • EHRs
  • Remote Patient Monitoring
  • Sponsored Webinars
  • Medical Technology
  • Billing and collections
  • Acute Pain Management
  • Exclusive Content
  • Value-based Care
  • Business of Pediatrics
  • Concierge Medicine 2.0 by Castle Connolly Private Health Partners
  • Practice Growth
  • Concierge Medicine
  • Business of Cardiology
  • Implementing the Topcon Ocular Telehealth Platform
  • Malpractice
  • Influenza
  • Sexual Health
  • Chronic Conditions
  • Technology
  • Legal and Policy
  • Money
  • Opinion
  • Vaccines
  • Practice Management
  • Patient Relations
  • Careers

Investment Derby

Article

Our second quarter results show five of our six financial pros and physician investors beating the market, and one is blowing it away.

 

Investment Derby

Jump to:
Choose article section...The Investment Pros Joe Duarte, MDRam KolluriMichael GoldstonThe MDs Warren B. Shaffer, MDRajendra R. Shroff, MDMichelle Taube, MD

Our second quarter results show five of our six financial pros and physician investors beating the market, and one is blowing it away.

By Leslie Kane
Senior Editor
Research assistance provided by Vicki F. Brentnall

The market has finally seen some bright days, and our participants are basking in the sun.

In February, we asked three investment professionals to create hypothetical $100,000 portfolios. We later randomly selected three Medical Economics readers, who are avid investors, to join the challenge. So far, the results are impressive. The Standard & Poor's 500 Stock Index (composed of large companies) rose 16.8 percent for the six-month holding period since the contest began (Feb. 1 through July 31); our pros' portfolio returns ranged from 13.9 percent to 33.4 percent in the same time frame. The S&P 500 Stock Index rose 8.5 percent in the second quarter (May 1 through July 31), when our physician investors entered the race; their portfolios brought in from 18.7 percent to an eye-popping 94.7 percent returns in those three months.

The burst of life from small- and mid-cap stocks may account for part of the uptick. The S&P MidCap 400 Stock Index returned 13.6 percent, and the S&P SmallCap 600 Stock Index rose 16.6 percent.

Not surprisingly, family physician Michelle Taube's portfolio, which delivered the top return, contains only small-cap stocks. Most of her holdings nearly doubled in three months, and one company, 24/7 Real Media, increased almost sixfold. Still, the market can't claim all the credit; the best-performing small-cap mutual fund returned far less than Taube's portfolio—just 43.5 percent—during the quarter.

Internist Rajendra Shroff's portfolio came in second, up 39.1 percent. He sold Factory 2-U Stores and Carreker and bought Aether Systems, a provider of wireless services and software, and E.piphany, which develops marketing software.

We'll update the portfolios again in our Jan. 23, 2004 issue. Here's a closer look at where our model portfolios stand now.

The Investment Pros

Joe Duarte, MD

River Willow Capital Management • Dallas

"I chose stocks that were economically sensitive but could also show some earnings growth," says Duarte. "I was fortunate to catch the market right at a nice trough. The portfolio really got a boost from Apple Computer, Business Objects, and Sears Roebuck, all of which benefited from the market's expectations of an improving economy.

"Sears had been very beaten up, and took a turn upward because of improved earnings as well as the market's expectations," he says. "Apple also had shown some relative strength prior to April. It was moving sideways while the market was falling; then it moved ahead."

 Company
Value on 2/3/03
Value on 7/31/03
Alcatel
$9,997
$13,577
Amgen
9,998
0
Apple Computer
0
14,819
Business Objects
9,999
15,126
Centex
10,002
0
eBay
9,996
0
Engineered Support Systems
9,990
0
ExxonMobil
0
10,174
Flextronics International
10,007
0
Hitachi
0
13,401
Iron Mountain
10,020
0
LaBranche & Co.
0
10,559
SBC Communications
9,996
9,849
Sears Roebuck
9,998
15,666
Wells Fargo
0
10,525
Cash
6
19,731
Total
$100,000
$133,428
Change
+33.4%

 

Ram Kolluri

GlobalValue Investors • Princeton, NJ, and New York City

"My portfolio's performance is similar to that of the overall market during the same period," says Kolluri. "That's because I have a well-balanced portfolio in lieu of a more volatile arrangement of stocks, which may compromise some investors' goals.

"The market had quite an impressive showing during this quarter," says Kolluri. "Strong industries that helped lift the market included precious metals within large-cap stocks; textiles and general merchandisers within mid-caps; and leisure companies within the small-cap universe."

Company
Value on 2/3/03
Value on 7/31/03
Company
Value on 2/3/03
Value on 7/31/03
Abbott Laboratories
$1,906
$1,987
International Game Technology
1,972
2,553
Abercrombie & Fitch
2,004
2,310
ITT Educational Services
1,987
2,785
Aflac
2,008
1,998
Johnson & Johnson
1,984
1,932
Alltell
2,015
2,043
Landauer
2,009
2,297
Amgen
1,987
2,708
Marsh & McLennan
2,004
2,360
Applebee's International
2,002
2,456
MBNA
2,003
2,677
Bandag
2,006
1,937
The McGraw-Hill Companies
2,013
2,085
Bank of America
2,031
2,437
Microsoft
1,993
2,226
Bard (C.R.)
1,984
2,416
Mylan Laboraties
2,004
2,538
Bemis
2,007
2,082
The New York Times Co.
2,002
1,839
Biomet
2,012
2,146
Old Republic International
2,008
2,583
CH Robinson Worldwide
1,989
2,634
Oracle
1,997
1,990
Citigroup
1,994
2,631
Pactiv
2,000
1,936
The Clorox Co.
1,987
2,281
PepsiCo
1,984
2,274
Colgate-Palmolive
1,985
2,148
Pfizer
2,004
2,212
ConAgra Foods
2,011
1,890
Qualcomm
1,996
3,156
Dell Computer
2,004
2,829
Sysco
1,997
2,064
Exxon Mobil
2,015
2,128
Tyco International
1,953
2,273
General Electric
1,990
2,481
United Technologies
1,971
2,351
Graco
1,997
2,747
Wal-Mart Stores
2,008
2,356
Hudson United Bancorp
2,010
2,379
Wyeth
1,991
2,352
International Business Machines
2,034
2,120
Cash
10,147
9,158
Intel
1,994
3,168
Total
$100,000
$113,873
International Flavors & Fragrances
2,002
1,918
Change
 
+13.9%

 

Michael Goldston

Cambridge Equity Advisors • Brentwood, TN

"Iam very pleased with my portfolio's performance. We continued to surpass the market by a nice margin," says Goldston. "I originally placed half the money in steady, large companies to provide some dividends and reduced volatility. I put the other half in more mid-size stocks that offered higher growth expectations. This balanced approach has generated market-beating returns, while avoiding the volatility and risk that can accompany some more aggressive styles."

Company
Value on 2/3/03
Value on 7/31/03
AOLTime Warner
$8,162
$10,801
Apollo Group
6,669
9,746
Bed Bath & Beyond
6,700
7,766
Concord EFS
7,330
0
Fox Entertainment Group
5,526
6,054
General Electric
8,863
11,051
Gilead Sciences
6,980
13,646
JDS Uniphase
8,100
9,030
Lockheed Martin
7,658
0
Lucent Technologies
9,955
9,366
Motorola Equity Units
7,638
8,288
Nasdaq-100 Index Tracking Stock
7,332
9,540
Starbucks
9,088
10,932
Cash
1
14,973
Total
$100,000
$121,193
Change
+21.2%

On June 30, Goldston sold all shares of Concord EFS for $7,360 and Lockheed Martin for $7,173. The proceeds were held as cash.

 

The MDs

Warren B. Shaffer, MD

Family Practice • Alexandria, VA

"I chose my companies after doing intensive research, paying attention to diversification. These are the most important factors in picking winning companies," says Shaffer. "As a result, I'm getting some nice gains from McDonald's, Polaris Industries, and Charles Schwab. Internap Network Services, my best performing stock, was beaten down in the past few years, but strong balance sheets, a rise in earnings per share, and good decisions from the company's executive officers have ultimately boosted its share price."

Company
Value on 5/1/03
Value on 7/31/03
Abbott Laboratories
$13,408
$13,033
Allergan
6,674
7,655
Anheuser-Busch
4,988
5,201
Becton, Dickinson & Co.
3,540
3,672
Charles Schwab & Co.
8,199
9,901
Harley-Davidson
4,444
4,693
Internap Network Services
4,400
12,700
Johnson Controls
8,224
9,702
McDonald’s
3,420
4,602
Paychex
12,460
13,004
Pfizer
6,150
6,704
Polaris Industries
5,287
7,931
SunTrust Banks
8,583
9,204
Target Corp.
3,344
3,838
Wal-Mart Stores
5,632
5,600
Cash
1,247
1,248
Total
$100,000
$118,689
Change
+18.7%

 

Rajendra R. Shroff, MD

Internal Medicine • Centralia, IL

"I attribute my portfolio gains partially to the fact that I hold many small-cap stocks, which are doing well, and partly to my technical analysis, which I feel is giving indicators that the market is rising in certain areas," says Shroff. "I do not have a buy-and-hold strategy. I look at the direction and various measures of the moving average, which shows the direction of average stock prices over a time period. I pay particular attention to 5, 10, and 50 days, and then buy or sell stocks based on the pattern I see. Based on those signs, I bought two new stocks, and sold two of my original holdings."

Company
Value on 5/1/03
Value on 7/31/03
Aether Systems
$0
$5,238
AirTran Holdings
5,103
8,470
Amkor Technology
6,435
12,478
Carreker
5,640
0
ChipPAC
6,253
6,601
Comstock Resources
6,105
7,068
DoubleClick
7,095
9,257
E.piphany
0
4,500
Factory 2-U Stores
6,986
0
Ligand Pharmaceuticals
6,683
9,705
Magma Design Automation
7,064
9,377
Mattson Technology
7,560
11,610
Sohu.com
6,953
17,883
SpeechWorks International
7,178
7,112
WebMD
6,273
7,852
Xerox Group
7,395
8,100
XM Satellite Radio
7,275
10,328
Cash
1
3,482
Total
$100,000
$139,057
Change
+39.1%

 

Michelle Taube, MD

Family Practice • Eugene, OR

"I looked for low-priced stocks that had recently experienced small run-ups, thinking that those gains would continue in the future," says Taube. "I felt that with low-priced stocks, I could purchase more shares, and small increases in their prices would lead to large percentage increases in the portfolio. I also chose stocks that were very different from each other instead of relying on one or two types of stocks. Basically, I think that the portfolio has done well because small-cap stocks have experienced a rebound, and all of my stocks are small-caps."

Company
Value on 5/1/03
Value on 7/31/03
Administaff
$15,975
$31,775
AMR
11,200
23,375
B/E Aerospace
4,500
9,375
Centillium Communications
14,475
22,250
Midway Games
7,875
5,375
Overstock.com
16,000
21,620
SupportSoft
6,600
16,660
Transmeta
9,500
16,600
24/7 Real Media
3,100
18,300
Tripath Technology
600
2,560
TRM
9,500
26,100
Cash
675
675
Total
$100,000
$194,665
Change
+94.7%

 

Leslie Kane. Investment Derby. Medical Economics Oct. 24, 2003;80:40.

Related Videos
Peter H. Reilly, HUB International
Peter H. Reilly, HUB International: ©HUB International
Peter H. Reilly, HUB International: ©HUB International
Peter H. Reilly, HUB International: ©HUB International
Peter H. Reilly, HUB International: ©HUB International
Peter H. Reilly, HUB International
Georges C. Benjamin, MD
Georges C. Benjamin, MD
© 2023 MJH Life Sciences

All rights reserved.