Searching for Big Ideas
FUND MANAGER: Gerald Jordan, 41
TENURE: Started limited partnership in 1996, converted to mutual fund in January, 2005.
EDUCATION: AB (1989) and MBA (1994), Harvard University.
SNIFFING OUT OPPORTUNITY: Looks for situations in which investors have misunderstood a group of stocks or an industry. "We want a big idea that will work out over the next 12 to 24 months," he says. In 2004, for example, he bought homebuilders because they had single-digit price-earnings ratios at the same time interest rates were down and home prices up. He sold them in late 2005 after they peaked.
A NEW PLAY: Doubling up on health-care stocks.The reason: He expects big companies such as Genzyme (GENZ), Humana (HUM), and Schering-Plough (SGP) will increase earnings 10% to 20% over the next two years vs. less than 5% for the overall market.
A GREAT BUY: Oil-service companies that develop new wells, such as Transocean and Schlumberger. He predicts major energy companies will soon be "throwing money" into exploration.
STOCKS HE'S AVOIDING: Most technology stocks. "The fundamentals are deteriorating and the valuations just keep going higher." He says big companies such as Intel (INTC) and Nokia (NOK) are no longer growing consistently and are more subject to economic cycles.
AFTER HOURS: Ran the Oct. 7 Chicago marathon. "With the heat, it was an unmitigated disaster." He finished, but "don't ask about my time."
FAVORITE CURRENT ALBUM: The Black Parade by My Chemical Romance.