Five Key Lessons from Top Money Managers

An in-depth look at strategies and techniques of five of the country's best money managers

In Five Key Lessons from Top Money Managers, Scott Kays taps into the investment knowledge of five of the nation's foremost money managers-Bill Nygren, Andy Stephens, Christopher Davis, Bill Fries, and John Calamos. Through extensive interviews with these investment experts, Kays found five principles that are common to all of them. This book discusses each of these five principles in detail-and gives readers specific tools to implement what they've learned by developing a step-by-step process that incorporates all five principles. Kays even teaches readers how to screen for companies that meet the criteria for quality businesses and then analyze three of the qualifying firms to determine if they sell above or below their fair market value.

Preface vii

1 The Return of Common Sense 1

2 Andy Stephens: Lead Portfolio Manager, Artisan Mid Cap Fund 7

3 Bill Nygren: Lead Portfolio Manager, Oakmark Select Fund, Oakmark Fund 29

4 Christopher C. Davis: Portfolio Manager, Selected American Shares 55

5 Bill Fries: Portfolio Manager, Thornburg Value Fund, Thornburg International Value Fund 91

6 John Calamos Sr.: Portfolio Manager, Calamos Growth Fund 113

7 Five Common Principles of the Professionals 142

8 The Artist Meets the Technician: Developing an Investment Philosophy and Process 161

9 Finding the Blue Light Specials 178

10 Valuing Stocks 186

11 A Big Value in an Orange Box 216

12 PEs, PEGs, and IRRs 224

13 Just Do It! 249

Appendix 1 Investment Resources 257

Appendix 2 Stock Investment Screen 260

Notes 269

About the Author 273

Index 275

SCOTT KAYS, CFP, founded Kays Financial Advisory Corporation in 1985, an Atlanta-based money management firm now with over $100 million in client assets. He has written numerous magazine articles and presented financial seminars for major corporations, including IBM, AT&T, and BellSouth. He has been quoted in the New York Times, Washington Post, Investor's Business Daily, Bloomberg Wealth Manager, Journal of Financial Planning, and Money magazine. Kays earned a BS in industrial management from the Georgia Institute of Technology. He is also a member of Mensa (the international high-IQ society), Gamma Beta Phi National Honorary Fraternity, and the Financial Planning Association.

Praise for Five Key Lessons from Top Money Managers

"This book can help you implement and hone a successful investing strategy. Kays distills the strategies of some of the market's best thinkers and shows you how you can put their ideas to work for yourself. Novices and pros alike will find much of value here."
—Don Phillips, Managing Director, Morningstar, Inc.

"It is rare to find a book like this that is both advantageous for the adept, well-seasoned money manager as well as amateur investors seeking to build their own personal investment philosophies. Kays continues to prove his proficiency in financial insights with the analyses in this book."
—Gene W. Henssler, PhD, President and CIO of The Henssler Financial Group Portfolio Comanager of The Henssler Equity Fund

"An interesting, informative, and understandable book on investing that is ideal for both the novice and advanced investor. Kays provides a process for evaluating securities that every serious investor should be aware of if they want to improve their investing abilities."
—Billy M. Williams, Chairman and founder of National Association of Investors Corporation (NAIC), Atlanta Chapter

"Reading this book is like having a private audience with some of the best investment managers in the country. A practical how-to guide for developing a winning investment process."
—Peter C. Speros, CFP^®, Managing Director, Sullivan, Bruyette, Speros & Blayney, Inc.

"A serious book for serious investors that deserves shelf space in your library. Read it and profit. You'll be a MUCH better investor."
—Harold Evensky, Chairman, Evensky & Katz