Here's What 2 Professional Money Managers Told Us About Investing
Benzinga recently caught up with two professional money managers, Michael Harris of River Wealth Management, and Jeff Ross of Vailshire Capital Management, to ask them how they learned to invest and what advice they have for new investors.
Here's what they had to say.
Today, Michael Harris is the CEO of River Wealth Management, where he manages money for 35 clients as an independent registered investment advisor.
But it wasn’t always that way. Harris first entered the stock market in 1987, then took a 14-year break after blowing out his account. After working for a major financial services firm, he left in 2010 to start his own shop.
Benzinga: What was the beginning of your investing career like?
Harris: I was in real hard and heavy for about three years. Then I got humiliated and exited the market altogether and didn’t have anything to do with it again until 2004. I had a brand new degree in finance and thought I knew everything and got burned playing on margin. No more intuitive trading. I discovered that there were a lot of folks that knew a lot more than I did about [the market] who were still failing.
Benzinga: What made you want to get back into the markets?
Harris: I thought it was a den of thieves and crooks and a lot of unsavory folks. But that was still what I really wanted to do. I wanted to be in a position to help people make sound financial decisions.
I got in because, very frankly, I wanted to have a career that allowed me to help people and allow folks to prepare for retirement, college education for kids, all the same things that a lot of us get in the business now for.
Benzinga: You left a large financial services firm to branch out on your own. What made you do that?
Harris: [My first account] was before I’d ever had any industry training of any time. I learned a lot more as I was in the market as a financial advisor in the industry, and I decided I could get as good return as any of the mutual fund managers did. And I do.
Benzinga: What kind of trader would you say you are?
Harris: A value momentum trader. I look for companies actively traded over $2 billion in market cap with good momentum, above their 20, 50, and 200 day moving averages. Low beta, generally low P/E and PEG ratios. That's where I start. After that, I look for things that are more qualitative.
Benzinga: What advice would you give to a new investor?
Harris: For someone who’s just starting out I would tell them to stick to indexes rather than individual securities. The major indexes are cheap.
Benzinga: What was your best trade ever?
Harris: My best trade was when American Airlines Group Inc (NASDAQ: AAL) went down to $0.30 a share. I only wish I’d started at 30 cents and left it there instead of selling at $0.35. I didn’t have much confidence in my ability to predict price.
Michael’s portfolio and trades can be viewed here on Peeptrade.
Jeff Ross is the founder of Vailshire Capital Management, LLC, an asset management company based in Colorado. A former Interventional and Diagnostic Radiologist, Ross started Vailshire in 2013 and resigned from his medical career to concentrate on the firm full time just one year later. Vailshire manages 50 client accounts and oversees hedge funds focused on healthcare and biotechs.
Benzinga: Why did you start actively investing?
Ross: I’ve always been a numbers guy. Sort of like a quant at heart. I’ve just always loved investing. I enjoy studying balance sheets and looking for hidden values around the numbers. I really like investing in individual companies I really believe [are] in for the long run.
Benzinga: Is that why you started Vailshire Capital Management?
Ross: I’ve always had a real love for investing and a hobby for doing it, and I just wanted to get to the point where I could start investing for other people as well.
Benzinga: You mostly focus on biotechs and healthcare. Is that because of your medical background?
Ross: We try to invest in what we understand, and I just really understand that area. Honestly, it’s been a rough time to be in it over the last 18 months. It doesn’t help that the politicians are focusing on the few bad apples in the sector because it’s bringing the whole sector down.
Benzinga: What type of investor would you say are you?
Ross: I’m a long-biased investor. Generally in equities, but I'll dabble in anywhere. I’m setting cash aside now to buy some corporate bonds that are taking a beating. I'll invest in REITs as well, as well as gold and silver minors.
Benzinga: You post your portfolio on Peeptrade so other people can see your trades. Why?
Ross: I like to consider myself a champion of the little guy. I love running a hedge fund, but what’s cool about Peeptrade is I can put the trades I do in my hedge funds on there and charge a small fee for if anyone wants to see what I’m doing. So I believe in what they’re doing. I think it’s a great idea.
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