In the current issue of Forbes magazine, there's an interesting feature on Canadian value investor Randolph McDuff - "the best stockpicker the world has never heard of." That's partly because he lives in Manitoba, in the far north of Canada, "close to polar bear country, where Hudson Bay winds chill the air to 40 degrees below zero and the wait for spring lasts eight months..." Despite his location in the middle of nowhere, it's certainly hard to argue with McDuff's stockpicking record:
"Since McDuff began running his RMG ValueCatalyst small-company fund eight years ago, he has earned a compound annual return of 36.4%. Not a single diversified stock fund in Lipper Analytical's universe of 1,555 mutual funds can match that. Ken Heebner's CGM Focus Fund comes closest at 32.2% a year over the same period. McDuff's RMG Value Oriented Growth, which buys large companies like Bayer and Fresenius Medical, comes in third at 25.5%. Warren Buffett's Berkshire Hathaway has returned a compound annual 11% over that period; the S&P 500, 1.1% (including dividends)."
McDuff prides himself on owning companies "the [analyst] industry doesn't cover, covers poorly or covers with largely plagiarized reports." There is one catch, however. McDuff's RMG ValueCatalyst fund isn't a mutual fund in the traditional sense and it requires a minimum $50,000 investment to gain access to McDuff's stockpicking skills:
"For anyone who likes McDuff's perspective, and track record, the bad news is that you can't hitch a ride directly on RMG ValueCatalyst because it's a mutual fund on paper only. McDuff set up the simulation on the investing Web site Marketocracy.com, where his results are monitored and he is ranked number one among 70,000 managers. If you want to play along and have at least $50,000 to invest, Marketocracy Capital Management will mimic McDuff's portfolio for a fee of 1.9% of assets a year."
Which is not as difficult as it might sound. It's basically the same as a TradeKing brokerage account holder picking stocks, opening up his or her portfolio to the TradeKing community, and letting a third party handle the expenses of updating the portfolio on a constant basis for a 2% management fee.
[image: Manitoba Welcomes Us]
NOTE: The performance quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate; thus an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted herein.
