Growing Rich - Arabictrader.com

GROWING RICH WITH GROWTH STOCKS
didn’t think it was right for me to trade stocks in my portfolio when
I was responsible for making recommendations or editing those of
the other analysts under me. I know not everyone agrees with me on
this.” Besides, he didn’t have a lot of money left after expenses. He
and his wife were raising six children (their own four and two foster
children), and had plenty of tuition to pay. They also invested in
homes.
After leaving Dean Witter Reynolds, he hooked up with the small
arbitrage firm Twenty-First Securities Corporation. Founded by Robert
N. Gordon in 1983, the company specializes in low-risk money
management for individuals and institutions. It also has a corporate
cash-management department, which uses synthetic money market
instruments and bona-fide arbitrage strategies to generate returns
that are greater than those offered by Treasury bills for a company’s
excess cash. Stovall is now a board member of the firm and president
of his own investment division, called Stovall/Twenty-First Advisers.
“When I left Dean Witter Reynolds, some wealthy families I had been
helping informally opened accounts with me right away,” he says.
“Then, through a combination of my media exposure and recommendations
from satisfied clients, I built up a pretty good business of
prosperous families and individuals.” Stovall and Twenty-First Securities
currently oversee around $1 billion in assets. Stovall makes all
of the investment decisions for those accounts he personally supervises.
“The firm has about 35 employees, but most of them are involved
with our risk-averse arbitrage operation,” he adds. “We have
a trading room, operations department, accountants, tax lawyers, and
about eight brokers.”
Partly because most of his clients are over the age of 50, he invests
their money cautiously. “I use a lot of convertible bonds and convertible
preferreds for both the income component and the appreciation
potential,” he says. “I’m more aggressive with these instruments than
most. Many managers don’t use convertible preferreds and debentures
at all because, at least in their minds, they represent a combination
of the worst aspects of both stocks and bonds. The quality rating of
a convertible is usually less than that of a better-grade fixed-income
security. What’s more, if you buy the convertible of a company whose
stock is hot, the convertible won’t go up nearly as much as the common
because it has conversion limitations. But my point of view is
that if you can find a company that isn’t doing too well, yet has an
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