This is part of a series of profiles highlighting women investors in the Fool community. Find out what makes the fairer sex better at picking stocks at fool.com/girl.
Longtime Fool, cat lover, and value investing expert LeKitKat has been a source of knowledge, support, and advice for countless investors on our boards over the years. Read on to learn more about LeKitKat, including what she’s buying right now.
How did you first get interested in investing?
When many were well into the first decade of a career and growing their 401(k)s, I was going back to school looking for my calling. It took 13 years and a lot of study hours, but I eventually ended up in the last job I would ever need.
After several years, it began to look like we would have enough cash left over at the end of the month to invest some. This was a completely novel experience after years of living paycheck-to-paycheck. Having absolutely no interest in investing and not knowing the difference between a large cap and a small cap, we turned the job of investing over to a full-service broker.
No one ever taught us anything about handling money for later in life, so we thought a broker would be the answer. The broker did not do well, and with the crash in 2000, we saw a lot of our investments whittled down to nothing. I have to give credit to the Fool in its early years for its inspiration and support. At that time, [David and Tom] Gardner told us we could do it ourselves and probably better than our brokers. Turns out they were right.
What was your first stock purchase?
[After the 2000 crash,] I fired the broker and started buying mutual funds. I felt unqualified to buy stocks initially. The first companies I was brave enough to buy were Anthem (now WellPoint) and Johnson & Johnson. Returns were good, as the basis was low and the companies were solid and in growth industries.
How would you describe your investment philosophy?
I have learned that the price you pay for the risk you take is key. Low cost does equal good value, and it is possible to get in at a price you consider too high and still do well. It requires knowing as much as you can about your investment and its possibilities through your own work. Relying on the opinions of others telling you what to buy does not always work to your advantage because even the professionals can be blinded by bias.
What was your worst investment?
Worst investment ever was Boston Scientific, when they had some manufacturing issues in Ireland and the stock dropped. It has never been anything close to a good company or a good buy, and was a great lesson in what too much debt and an excess of management hubris can do to a reasonably good company. The stock has never recovered and does not deserve space in any portfolio.
In our upcoming book, Warren Buffett Invests Like a Girl, we make the case that women are better suited temperamentally to be great investors – they are generally more patient, take less risk, stay calmer in turbulent markets, do more research, and hold for the long term. Do you think you invest like a girl?
I don’t trade in and out fast or often. I have occasionally had second thoughts and gotten out of something quickly after reconsidering how misguided I was to buy in the first place. I tend to let the winners run -- often into what seems like overvalued territory. Knowing what the company can do helps allay the urge to sell when all around you are getting out. That happened in 2008-2009.
There were many times during the financial crisis I was tempted to cash in all my holdings. It was a difficult urge to overcome. There was no time in my short history with the market that was comparable and no solid footing or signposts to guide us.
Rather than sell it all, I decided to redouble my research and try to figure out for myself whether all the companies in the world suddenly had no value. Spending time with filings and management calls kept me busy and my finger off the sell button. It also convinced me most of the stocks I owned and the ones I wanted to own were good businesses and the market was being an idiot. I did a lot of buying in the spring of 2009.
What are you buying right now?
Right now, I am looking at Mako Surgical
Want to learn more about how to invest like a girl? Warren Buffett Invests Like a Girl is available June 21, but you can get chapter one today for FREE.