Model Portfolio mkoza:TGF

My name is Mike Koza, and I was born in 1959. I am a native of Sacramento, California, where I currently reside. I am an engineer by trade (BS '81 Caltech) specializing in environmental control and remediation. Formerly a happily single avid outdoorsman, I married at age 42 to my wife of 8 years, Maria.

In late 2000, my wife noticed my mathematical skills and told me to dump my mutual funds and choose my own stocks. Thus, in early 2001, I started investing in stocks, joined Marketocracy to track my portfolio, and was immediately successful, earning top spot in Marketocracy's quarterly rankings in my first full quarter as a member. Some of my early winners were Pacificare, a healthcare turnaround situation with a new CEO, and F5 Networks, a beaten down tech stock with a great product. Although I originally held these stocks less than a year, it is instructive to note that Pacificare was eventually acquired by UnitedHealth Group in 2005 at approximately 12 times my initial purchase price, and F5 Networks is still thriving today, trading at about 20 times my initial purchase price.

After my initial successes, I became a little too confident. Thus, in late 2001 and 2002, I learned some hard lessons about low price/book stocks, scams and fraud stocks, including Worldcom and ACLN Limited. Value investing has many dangers, as the cheapest stocks are often cheap for reasons that may not be immediately apparent. After several years of trial by fire, I learned how to avoid value traps, and managed to escape Healthsouth and China Expert Technology prior to their meltdowns.

In order to fulfill the dual demands of an engineering career and the stock market, I have had to make some sacrifices. My hobbies of whitewater boating, dancing and exercise have been cut to a bare minimum. I no longer watch television. I listen to recorded company earnings conference calls while driving and while at work. I sleep with 10-K's and 10-Q's under my pillow, and carry the Wall Street Journal in my back pocket. I have completed the first phase to becoming a CFA, but the time demands of guiding my investments through the economic downturn (and various tax considerations) mandated that I put this ambition on the back burner. Becoming a fund manager/advisor on a full time basis may yet be in my future, but at the moment, I am quite satisfied with contributing to a cleaner environment through my daytime job (which also serves to keep me from getting stressed out from following the market all day) and with my personal investing success (which probably pays better than most fund management jobs that I might be offered). I do not actively seek success, but with patience, I wait for the right time to arrive to make changes. This is also reflective of my investment style. Just a few calendar quarters of patience with the beaten-down stock of a quality company can put any investor well ahead of the pack.

Posted by Alan Stebbens at 1:25 AM | Permalink