Investing
Guru Focused: Robert Olstein's Short Sells
While it is rather rare that value gurus sell stocks short, Robert Olstein has been selling short in his Financial Alert Fund. The accountant-turned fund manager spots values by looking behind the numbers. In the second quarter of 2004, Robert Olstein sold short American Italian Pasta Co. (PLB) at $31. After about 6 months he covered at $20, easily made more than $1 million for his fund. Currently he is shorting two stocks: Computer Sciences Corp (CSC) and Fleetwood Enterprises Inc (FLE), although things do not always go that smoothly.
Robert Olstein is certainly one of the best money managers (that is why he is in GuruFocus?s Hall of Fame). The strategy of looking behind the numbers has brought his fund a 15.5% average annual return over 10 years after all fees. 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%.
Robert Olstein started shorting Computer Sciences Corp (CSC) in the first quarter of 2004 at an average price of $41. He said that the accounting of CSC is not in accord with its economic reality, CSC is worth about $30. The price of CSC did not go down, however. He then shorted more shares. But the price of CSC went up, by the fourth quarter of 2004, the price of CSC was $56. It came down some in the first quarter of 2005, Robert Olstein was confident enough to short more shares again. As of the end of the first quarter, his shorting position in CSC totaled 504,500 shares with an average price of $42. As of this writing, the price of CSC is $46.4.
The other short selling of Robert Olstein is Fleetwood Enterprises Inc (FLE). He thinks that Fleetwood Enterprises Inc is worth about $5-6 per share. He sold short 1,195,500 shares of FLE at about $9.2 per share in the first quarter of 2005. Right now Fleetwood has a price of $9.5 per share.
Interestingly, another highly respected value manager, GuruFocus guru, Robert Rodriguez, does not agree with his value peer Olstein. In the fourth quarter of 2004, Rodriguez added 269,500 shares of FLE to his holdings at around $14 per share. As the share price dropped to $9, he added 2,261,900 more shares, which makes his total holding of Fleetwood to 3,714,400 shares.
Who is right, Robert vs. Robert?
Dr. Charlie Tian is the Director of Research of GuruFocus.com, a website tracks the stock picks and market insight of guru investors such as Warren Buffett, George Soros etc.
Charlie Tian
Tags: article submission, articles, writers, writing, publishing, ezine, email marketing, email newsletter, emailSimilar articles
Going Offshore For Asset Protection
There are a number of key reasons why individuals and businesses consider going offshore for asset protection purposes.The asset protection advantages the offshore world offers extend from protecting a business from excessive taxation to opening doors to enable wealth and asset enrichment via the utilisation of offshore investment opportunities. Read more →Gold Topping $500 Really is a Big Deal
As gold topped $500, the news became front-page across the country, and radio and TV financial programs led off talking about the price of gold. Invariably, all noted that gold had reached nearly a two-decade high. Read more →Have You Ever Seen A Map of the World Turned Upside Down?
For those accustomed to viewing things a certain way, it is quite disconcerting. One almost expects the ocean to pour out. It just seems wrong. Yet, the way we view the globe is entirely arbitrary, based largely on the way we? Read more →Here's a Safe Alternative to the Stock Market
Are you getting consistent 10-15% or more yields from your CD's, Stocks, Savings Accounts, IRA's and other investments? If not, read on...Did you know that there is a very safe investment that produces consistently high yields while at the same time provides security and liquidity? Read more →Aphorism
The only investors who shouldn't diversify are those who are right 100% of the time (1983)
John Templeton