Q&A with Jordan Kimmel, Portfolio Manager, Magnet Management LLC, and Tocqueville Asset Management
December 2005.  Jordan Kimmel scores stocks. His quantitative strategy, called the Magnet Stock Selection Strategy, underlies two hedge funds he runs through his Randolph, N.J.-based firm, Magnet Management L.L.C. The strategy has scored well with Wall Street, especially in recent months, as Forbes has invited him to publish a newsletter based on his strategy, and Tocqueville Asset Management, a $5 billion asset management firm based in New York, has asked him to co-manage one of its mutual funds. We caught up with Kimmel last week, and he shared with us his quantitative approach.
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Seeing Green: Q&A with Jack Robinson of Winslow Green Growth Fund
October 2005.  High-priced oil has made alternative energy increasingly attractive to both consumers and investors, and one fund taking advantage of this trend is the Winslow Green Growth Fund (WGGFX). The Boston-based mutual fund, with $120 million under management, has been investing in so-called green companies since inception five years ago (and for six years prior to that as a commingled trust), and its returns of 31.5% in the last 12 months through September 30 have had investors seeing green. Fund manager Jack Robinson shares his strategy.
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No Butts About Value: Interview with Phil Butts, portfolio manager, Silver Creek Equity
September 2005.  Overlooked...under-followed...misunderstood: A stock with this description might sound like a throwaway, but to Phil Butts it can be a keeper. Butts, who manages approximately $20 million in individual small-cap accounts at Santa Barbara-based Silver Creek Equity Management, invests in small cap value stocks -- stocks the Street hasn't yet bid up even though Butts's research, honed from his eight years at Donaldson, Lufkin & Jenrette and five years at Smith Barney, indicates they harbor a few gems. He shares a few of these undiscovered ideas in the following Q&A.
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Running With Bares: Interview with Brian Bares, portfolio manager, Bares Capital Management, Inc.
August 2005.  When we last talked with Brian Bares, portfolio manager at Austin, Tex.-based Bares Capital Management, Inc., back in December 2002 he told us about two stocks, Cherokee (CHKE) and Landauer (LDR), which proceeded to go up 58.24% and 16.15% respectively in 2003. Those were halcyon days for small and micro caps, but Bares, whose fund is up 18 1/2% annualized since inception in August 2000 through July 2005, says there are plenty of new ideas in an equity universe he believes is always rife with opportunities if you know how to find them. Bares, whose micro-cap fund has grown from $1 million back in December 2002 to $70 million and will close at $100 million, shares his ideas for doing just that.
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Turnaround Returns: Interview with First Wilshire's Scott Hood
September 2004.  When we last spoke with Scott Hood, money manager at First Wilshire Securities Management, back in December 2002, he gave us two stock picks, Ezcorp (EZPW) and SM&A (WINS), that went on to gain 148% and 224% respectively in 2003. That was indicative of the kind of year First Wilshire had in 2003. The Pasadena, Calif.-based firm, which manages $170 million in primarily individual accounts focusing on microcap value, saw returns of 101% net of fees in 2003. This year, the returns are just a little over 10%, as the small-cap sector has simmered down with the rest of the market. Still, the firm, with annualized returns of 19.6% since first tracking performance in December 1986, has outperformed the market this year, and Hood explains their winning strategy.
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Hedging on the Long Side: The Ascend Fund's Dick Morrison
April 2004.  Dick Morrison doesn't run a hedge fund but he's hedging his bets. The manager of the Lafayette, Calif.-based Ascend Fund LP, a long-only private mutual fund, peppers his primarily small-cap portfolio with large-cap positions that diversify against a downturn in the small-cap sector. He is also heavily into healthcare, gold stocks and fixed income in a defensive posture against an overheated stock market. A former founding partner of Jurika & Voyles, where he grew $40 million under management into $5 billion in 10 years from the mid-1980s to the mid-90s, Morrison started Morrison, Frazier LLC and The Ascend Fund eight years ago and manages $100 million, $35 million of it in the fund. In 2003, The Ascend Fund netted 69.8%.
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Tapping the PIPE Market: Bristol Investment Fund's Non-Market-Correlated Strategy
January 2004.  In its three years of operation, Bristol Investment Fund has navigated through some historical extremes in market sell-offs and rallies, and the fund, true to what its charter purports (to be non-correlated to the direction of the market) has managed steady, robust returns of 19%, 36% and 34%, respectively, in 2001, 2002, and 2003 -- net of fees. The Los Angeles-based hedge fund, with $21 million now under management, garnered these returns investing in PIPES -- private investments in public entities -- and its co-founder and co-manager Paul Kessler, together with Mark Tunney, an advisor to the fund, describe why this strategy is on such a win streak.
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Going for the Growth: Tom Barry's New Small-Cap Growth Fund
November 2003.  When we last spoke to O. Thomas Barry in May 2002, he told us about Nam Tai Electronics (NTE), a portfolio holding of his Bjurman, Barry Micro-Cap Growth Fund, at a split-adjusted price of about $7. Today, the stock is over $35. Barry's Micro-Cap Growth Fund has reflected the success of that stock, up 62.2% this year through November 14. The Los Angeles-based fund closed in May of this year with $600 million under management, but Barry opened the Bjurman, Barry Small Cap Growth Fund, and that $51 million fund is up 41% on the year. Barry shares the strategy of the new fund.
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Behind Bridgeway's Coke Formula (and Why "Ultra Small" is the Real Thing): Interview with John Montgomery
June 2003.  When you think small caps, you can't forget the drought of the late 90s, but the Bridgeway Ultra-Small Company Fund gained 40% in 1999. It continued its strong returns in the bear market, up 4.8% in 2000, 34% in 2001, 4.2% in 2002 and 26% year-to-date through June 23. The $75 million fund is closed to new investors, but its sister fund with slightly lower but comparable returns, the Bridgeway Ultra-Small Company Tax Advantage Fund, with $263 million is assets, is open. John Montgomery, founder of Houston-based Bridgeway Funds, shares the strategy of both of these ultra-small funds and why he uses quantitative analysis in picking these tiniest of public companies.
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Mining the Upper Midwest: Perkins Discovery Fund's Dan Perkins
May 2003.  In the Land of a Thousand Lakes where Dan Perkins resides, there is an abundance of more than water. Perkins, who co-manages the Wayzata, MN-based Perkins Discovery Fund, says there's a bounty of good, small companies up his way. About half of the holdings in his $3.5 million micro-cap fund are, in fact, Upper Midwest regional firms. With the fund returning +11% so far in 2003, they've been good discoveries, indeed.
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Picking the Dirt, Peeling the Onion: Interview with Silver Creek's Phillip Butts
April 2003.  Phillip Butts doesn't mince words about the market. "My outlook over the next 2-3 years is bleak," he says, noting the Dow could sink to as low as 4000. But the 12-15 stocks in his concentrated, small-cap-emphasized portfolio are not market correlated, or so his strategy aims. They're value stocks with catalysts for growth that his risk analysis shows have limited downside. Gauging from the returns of his private accounts, which were up substantially in 2000 and 2001 but gave back some in 2002, his formula is working. Butts, a former Vice President with Donaldson, Lufkin & Jenrette and Senior Vice President with Salomon Smith Barney, shares the strategy behind his three-year-old Santa Barbara-based Silver Creek Equity Management firm, which runs $5-6 million in private equity accounts.
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Playing the Field: How Buzz Heidtke Courts Winners
March 2003.  Buzz Heidtke views picking stocks a lot like choosing someone to date: He knows what he's looking for ahead of time and isn't afraid to go out with a number of them, to play a wide field. The result has been eight winning years out of nine for Heidtke's widely diversified MidSouth Investor Fund, an Atlanta-based hedge fund focusing on micro-cap value. The $26 million fund, which pays itself performance fees only after returns of +6%, is up 15.1% annualized since starting in 1993 (compared to 6% for the Russell 2000), with returns ranging from just -1.3% (last year, his only losing year) to +36%. "I work real hard on my standard deviation, on not losing money, and I'm also the largest investor in the fund," Heidtke says.
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The Best in Blend: Morningstar's Brian Portnoy on Buying Small-Cap Blend Funds
January 2003.  Typically investors think of analysts as professionals that research stocks. But Brian Portnoy, senior analyst at Chicago-based Morningstar, Inc., has the job of evaluating equity funds. Small-cap blend funds, in particular. This month, we talked to Portnoy about how he assesses funds, which funds he likes, what investors should look for and what the trends are in the small-cap space.
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Playing Themes with Low P/Es: First Wilshire's Scott Hood
November 2002.  The name First Wilshire Securities Management may not be on the tip of every small-cap investor's tongue, but the Pasadena, Calif.-based money management firm, with $55 million under management, has had the 2nd-best returns among U.S. small-cap blend managers over the last 7 and 10 years, according to Money Manager Review. It was also 4th for the last 3 years through September 30, 2002, according to Money Manager's ranking of leading private managers. First Wilshire has produced 3-year annual returns of 13.24% versus -4.08% for the Russell 2000 and -12.89% for the S&P 500. This year the firm's strategy, managed by Scott Hood and Fred Astman, is up just a few percentage points, but that's a far cry from the double-digit negative returns many investors have been dealt. Hood, with 10 years of experience in small-cap research and portfolio management, explains how the strategy has survived the bear market.
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Scoring with Micro Caps: Interview with Louis Navellier
October 2002.  Louis Navellier's Micro Cap Growth Portfolio is in the top 8% of its category for performance year-to-date, according to Morningstar, though in this battered market this translates into returns of -18%. Investors' flight from equities across the board this year sapped micro caps of the little liquidity they enjoyed, exacerbating price declines. But Navellier, CEO and President of Reno-based Navellier & Associates, with over $5 billion under management, is confident that growth stocks, particularly in the micro-cap arena, will see a resurgence, noting that P/E to growth rates are at the most attractive levels he expects to see in his lifetime. Navellier, who is also editor of MPT Review and The Blue Chip Growth stock newsletters and a frequent guest on CNBC and other financial television programs, is well recognized for his quantitative strategy for selecting stocks.
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Small-Cap Tsunamis: How Scott Sterling Johnston Gets in Front of the Wave
September 2002.  Scott Sterling Johnston's Micro Cap Aggressive Growth portfolio was ranked #1 for the last year, three years and five years through June 30, 2002 by Pensions & Investments. It's a fact that Johnston, a 30-year industry veteran, mentions to us late in our interview, an afterthought among numerous industry accolades.
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Promising Vista for Small Caps: Interview with Kent Williams, Portfolio Manager, Vista Asset Management
August 2002.  Kent Williams has worked at some pioneering firms in his 33 years on Wall Street. He got his start at Weeden & Company in the late 1960s, which created Instinet and whose principal, Don Weeden, fought for negotiated commissions on the New York Stock Exchange. He was co-manager at Siebel Asset Management in the 1980s, working with Ken Siebel, one of the founders of Montgomery Securities.

Williams in his career has also provided strategic counsel and portfolio management for institutional clients at Merrill Lynch, Wood Island Associates, and U.S. Trust Company. He has lectured on behavioral finance at the Haas School of Business and taught portfolio management in Berkeley's Personal Financial Planning program. From 1985 to 1998, he served on the Trading Advisory Board to the American Stock Exchange, where he advocated for technology and transparency to the trading floor and for opening the specialist book to the public.

Selling Wood Island Associates to U.S. Trust at the end of 1998, Williams early this year formed Vista Asset Management, managing accounts for high-net-worth investors interested in small caps.
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Accounting for Returns: How Royce Special Equity Fund Gained 34% in Past Year
July 2002.  Charlie Dreifus's investing strategy hasn't changed in the four years he's run the Royce Special Equity Fund, but investors' appetite for small caps sure has. With small-cap value back in vogue, the $220 million fund, which fell 9.6% in its first full calendar year of 1999 when high-tech-growth reigned, has enjoyed returns of 34.1% for the 12 months through June 30, 2002. But other small value funds have gotten smacked in recent months while Dreifus, a 34-year industry veteran who spent much of his career at Lazard Freres and Oppenheimer, managed to make money in the abysmal second quarter, perhaps due to another new appetite by investors: investing in companies with pristine accounting practices. A chartered financial analyst and protg of Abraham Briloff, the Baruch College professor who emphasizes the importance of "accounting cynicism," Dreifus enjoys poring through SEC documents, scrutinizing financial statements in his quest for winning stocks.
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A Bares Market: How Bares Micro-Cap Equity Strategy Earned its #1 Ranking
June 2002.  Brian Bares can't boast a long track record but he can say this: He's at the head of the track. His two-year-old Bares Capital Management, which manages private accounts, was ranked #1 last year among private U.S. small-cap equity managers as tracked by Money Manager Review, up 68%. The Austin, Tex.-based firm's Micro-Cap Equity Strategy also placed first for the 12 months through March 31, 2002, up 79%. A chartered financial analyst and graduate of the University of Nebraska with a degree in mathematics, Bares attributes much of his success to math as well as to the principles of another great Nebraskan, Warren Buffet.
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Less is More: How Bjurman, Barry MicroCap Fund Became the #2-Performing Fund in Last 5 Years (+351%)
May 2002.  In March of 2000, with 70% of his fund in technology, Tom Barry's screens said to shift quick and fast out of the hyperventilating sector. As the bubble burst, his Bjurman, Barry Micro-Cap Growth Fund finished the year up 46%. This helped the Los Angeles-based fund, now with $310 million in assets under management, to a recent ranking by USA Today as the #2 performing fund among all domestic mutual funds over the last five years, up 351% annualized as compared to 26% for the Russell 2000 Growth Index. But Barry's back again in tech, as he discusses along with his winning strategy and the benefits of going micro.
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Buying Without Emotion: Hennessy Small-Cap Growth Fund's Winning Formula
April 2002.  After our last month's interviewee (T. Rowe Price's Preston Athey) talked about a cyclical shift toward growth funds, we screened for domestic small-cap growth funds with double-digit returns. Among the five that came up on Morningstar was the Hennessy Small-Cap Growth Fund, a $246 million fund out of Novato, Calif., that's up more than 14% year to date. Fund manager Neil Hennessy, whose 23 years in the business included positions at Paine Webber and Hambrecht & Quist, describes his unconventional "unemotional" strategy that made this fund profitable every year since it began in 1996, with an average annual return of 21.8%.
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The Price of Value: T. Rowe Price's Preston Athey
March 2002.  With a B.A. from Yale, M.B.A. from Stanford, nine years with the T. Rowe Price New Horizons Fund and the last 11 years managing its Small-Cap Value Fund, Preston Athey has an enviable educational and professional pedigree. He also has the benefit for managing a fund that is up approximately 7.9% year-to-date, with a trailing one-year return of 25.5%, ranking it in Morningstar's first quartile. Money has been pouring in, with the Small-Cap Value Fund's assets now at $2.4 billion, but it wasn't always this way and Athey is well aware of market cycles, including those within small caps themselves.
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Illiquid Dreams:  Finding Value in Micro Caps at Palo Alto Investors.
February 2002.  Palo Alto Investors isn't a fund you'll read about in Morningstar. It's a hedge fund, distinct from a mutual fund in that it has greater flexibility (the ability to go short as well as long), greater incentive for its managers (who, in addition to receiving a percent of assets under management, also get a share of profits), and more restrictions on its investors (i.e., big minimums and multi-year holding periods).

Focusing on micro caps with long-term horizons, the fund has netted investors 23.4% annualized over the last 10 years, nearly twice as much as the Nasdaq (+12.76%) and the S&P 500 (+12.91%). Chief investment officer Will Edwards, a Stanford University engineering graduate with a penchant for tech stocks who cut his teeth in small-cap research at T. Rowe Price, shares the strategies of his $200 million fund.
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What...Me Worry?: RCB Small Cap Value Manager's Long-Term View
January 2002.  Many of you may know the name Jeff Bronchick from his 'Buy Sider' column at TheStreet.com back in the day, but investors in his $12 million RCB Small-Cap Value Fund know this: He can spin a profit as well as yarn. His Beverly Hills-based fund returned 21.4% last year, achieving double-digit returns now in each of its three full years of operation. Bronchick has been managing small-cap investments since joining Reed Conner Birdwell in 1989, of which he is now a partner and chief investment officer. We caught up with him during one of this week's strong sell-offs.
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Finding the Future Intels:  Wasatch Manager Ajay Krishnan
December 2001.  Rumors of technology's death have been greatly exaggerated! That's the message in speaking with Ajay Krishnan, co-manager of the Wasatch Ultra Growth and Wasatch Global Technology funds. The high-growth funds, co-managed with Karey Barker, have outperformed a downtrodden sector this year, with the Ultra Growth Fund up 14.78% and the Global Technology Fund up 10.5% through December 12.
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The Mouse that Roared: Oberweis Micro-Cap Fund.
November 2001.  Up 13.3% for the year through November 14, and ranked in the top 1% of its category by Morningstar, the Oberweis Micro-Cap Fund has seen its assets double in the last month from $17 million to $34 million as investors have poured money into a winner. What's its secret? The whole under-loved micro-cap asset class for one, says fund manager Jim Oberweis, Jr., plus a fairly straightforward strategy that combines value and growth in identifying mice that roar.
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True Value: How the Aegis Fund Turned Up the Heat in 2001.
October 2001.  When you're up 30-plus percent in a year like this, you're probably very good and a little bit lucky. Scott Barbee, manager of the red-hot $27 million Aegis Value Fund in Arlington, Va., wouldn't mind admitting he's been long overdue for a little luck, what with managing a fund that began in 1994 just when small value was going out of vogue. As momentum stocks that rarely saw an operating loss they didn't like soared with the Internet craze, Barbee could only watch and wait for low P/Es to once again prevail. Prevail they have, and along with sector outperformance has come some quite good - and quite, well, timely - picks this year that Barbee shares.
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