Growing Rich - Arabictrader.com

GROWING RICH WITH GROWTH STOCKS
doesn’t stop them from duping many investors, though. I feel that if
you want to participate in the growth of the Pacific Rim or another
fast-growing region, you are better off buying American multinationals,
instead of local companies. I would much rather own Coca-Cola
over a hot-shot bottling company in Malaysia. Sure, investing directly
in stocks domiciled in these foreign lands can give you a much bigger
short-run bang for your buck, but too often they wind up seriously
collapsing or even disappearing.”
There are very few international names in Stovall’s portfolio, except
for the American Depositary Receipts (foreign stocks traded on a U.S.
exchange) of a select handful of companies based in Canada, the
United Kingdom, and northern Europe. “At least I can read and understand
the language that their annual reports are written in,” he notes.
“In addition, given the differences in accounting among the various
countries, I will buy stocks only in areas where the financials are
fairly straightforward.”
GLOBAL-GROWTH GUIDELINES
On the globalization front, Papp prefers American companies that
get 50 percent of their business abroad, although that number is
somewhat flexible as long as it’s above the average of 10 to 15 percent.
“In addition, I prefer to buy companies with real volume growth,”
he adds. “A company that has made a lot of money and saved even
more by cost reduction and restructuring is a one-shot deal. I want
the growth to be from volume and pricing growth.”
Although Papp’s acumen for reducing risk often leads him to large,
established companies, he’s always willing to look at promising
smaller candidates as well. “I don’t have a requirement to buy large
stocks,” he says. “It just so happens that many global companies tend
to be larger. But I’m not buying them because they’re large. I’m buying
them because they’re global and in the right industry. If they happen
to be large, that’s fine. But that’s not my goal.” It amuses Papp that
many reporters refer to him as a large-cap manager. When I posed
the size question to him, he almost angrily pulled out his list of top
holdings in the America Abroad fund to prove that five of his biggest
names were smaller companies.
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