Robert Olstein of Olstein Financial Alert Fund follows a value-stock strategy, backed by "very strict disciplines for buying and selling""Stocks that are under siege" are what Robert Olstein seeks for the Olstein Financial Alert Fund (OFALX ), where he serves as chairman and chief investment officer.
"We're in there buying when everyone else is selling," Olstein says. > >
But Olstein points out that his
fund has very strict disciplines for buying and selling, based not just on value but also on a company's cash flow and accounting.The most critical point, he
says, is comparing free cash flow with reported earnings.
This strategy has brought the fund a 16.5% average annual return over 10 years, after all fees, Olstein reports.Its only down year was 2002, off 19%.In 2000, the year the tech bubble burst, the fund was up 12%, and in 2001, up 17%.Currently, its top five holdings are American Greetings (AM ), Interpublic
(IPG ), Williams Cos.
(WMB ), Tyco
(TYC ), and Tribune
(TRB ).Olstein discussed his philosophy on stocks in an investing chat presented Apr. 21 by BusinessWeek Online on America Online, in response to questions from the audience and from Jack Dierdorff and Karyn McCormack of BW Online.
, this market is setting records in both directions, down and up.What's your prognosis for the direction we'll be going in?
, can you update us on how your fund has been performing?
, are you selling anything?Or shorting any positions?