Collections with a Smile

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These articles by Melinda Sherwood and Teena Chandy were published in U.S. 1 Newspaper on July 7,

1999. All rights reserved.

Investment Profile: A Dremen or an Alger?

A celebrity in the world of mutual funds, David Alger

of Alger Fund epitomizes aggressive fund management. "When I buy

David Alger, I know I’ve got the fastest growing stocks around,"

says Michael Delehanty, of Delehanty Investment Advisors in

Forrestal Village. In the opposite camp, there’s David Dremen

of Kemper Dremen. "He specializes in buying good U.S. companies

that are out of favor, and he has a record of consistently being better,"

adds Delehanty.

The moral of this tale: "When you’re buying mutual funds, you

really don’t know the individual stocks in your portfolio," Delehanty

says. "You should know your fund manager, however."

Delehanty offers more tips for those getting started in mutual funds

at his class "How to Buy Mutual Funds," on Wednesday, July

14, at 6:45 p.m. at Mercer County College. To register call 609-586-9446.

Cost: $48.

A former financial consultant for Merrill Lynch, Delehanty was an

adult student at Rider University when he graduated in 1992 with a

degree in liberal arts and a concentration in finance. He started

his own firm in the same year.

For the sake of the novice, Delehanty offers this analogy: imagine

a mutual fund as a kind of purse — it holds a lot of cash in the

form of many different stocks. The problem is, it’s somebody else’s

purse. "Fund managers only show you what was in the fund 90 days

prior — therefore you never really know for sure what’s in the

fund."

You can go the more traditional route of looking at a funds year-by-year

performance, but under the current circumstances, that may tell you

very little. "The mutual fund industry is exploding with new mutual

funds," he says. "Often times if you look at last year’s mutual

fund, it hasn’t been around for more than one to three years."

As a "contrarian," Delehanty advocates forgotten companies

on the principle that stocks are likely to "revert back to the

mean." "Investments are very dynamic. It’s constantly changing,"

he says. "Things that are out of favor will come back in favor

if they are a certain quality — if a company has a good balance

sheet and good revenue."

His point in case: "Japan Inc." "A year ago emerging market

mutual funds got tanked because of the Asia crisis, but this year

so far, many have had good returns," he says. "That’s reversion

to the mean."

Contrarian investing works with dollar-cost averaging, a regular periodic

investment program, into the fund that nobody wants, he says. "That

means you’re buying shares cheaply, and they will probably come back."

If you’re ready to select a mutual fund, Delehanty says that you should

first establish your goals. Are you a Dreman or an Alger? "Establish

whether you’re investing for income or capital appreciation,"

Delehanty says.

Once you know your objective, Delehanty says focus on the track record

of the manager, not the stocks. An "above average" manager

is all you need. "Hardly anybody is consistently the best,"

he says. "The guy who is the best had American Online in his portfolio,

and in the last three months he’s lost 35 percent of his money. The ones

that do spectacular usually revert back to the means."

The Internet is a good place to start your search; Delehanty suggests

Morningstar (http://www.morningstar.com) and Lipper Funds Inc.

(http://www.lipper.com).

Then, keep in mind that investments isn’t a sprint, it’s a marathon.

Few people invest so they can buy a house, he says. "You’re going

to be investing money for the rest of your life."

Top Of Page
Collections with a Smile

You don’t need to be unpleasant to collect money,"

says Howard Schachter, a partner in the new law firm of Schachter

Portnoy LLC. He left Jamieson Moore Peskin & Spicer to join Darin

S. Portnoy in opening a law office at 3490 Route 1, Suite 6, in

Princeton Service Center (609-514-8668; fax, 609-514-1599). They will

focus on commercial litigation, debt recovery, and creditors’ rights,

but especially creditors’ rights. "It’s a boutique firm, a sub

category," says Schachter, who majored in marketing management

at Kean College, Class of 1983, and went to New York Law School.

"Most people want to pay their bills but have run into problems,"

says Portnoy, who had had a solo practice in Trenton. He majored in

economics at Rutgers, Class of ’87, and went to Thomas M. Cooley Law

School in Lansing, Michigan, and he has been teaching business law

and legal assistance for seven years at Middlesex County College.

He will give a workshop on landlord’s rights at the Lawrence headquarters

of Mercer County Library on Thursday, July 15, at 7:30 p.m. Call 609-448-6668.

"The biggest mistake creditors make is they don’t get the proper

information beforehand," says Schachter. "They extend money

to the wrong individuals without checking it out. The best way to

avoid problems is to have the right information to help collect the

debt."

All debt collectors must operate under the Fair Debt Collection Practices

and the Fair Credit Reporting Act. Sometimes these lawyers represent

school districts, who — when they discover a student is not a

legal resident — try to collect for tuition owed. Often the client

is a hospital or a doctor. Landlords are particularly vulnerable to

debtors.

Portnoy says that not only should a landlord get the right information

before he or she lets the tenant sign the lease, but to keep the proverbial

wool from being pulled over the eyes, the landlord should verify that

information from several sources:

Social Security number;

Driver’s license;

Prior addresses;

Prior employments; and

Bank account information.

"When I represent a creditor I have to make sure that the

debtor does not end up hating the creditor," he says, "so

I use a psychological approach. Every debtor is different. Maybe they

don’t understand it’s OK to go into debt and to set up a payment arrangement."

No, debt collecting does not equate to stress collecting, Portnoy

insists. "If I can get the money back into the pockets of my clients,

the people who legitimately pay their bills will not have an increase

in medical care. I love the collection process," says Portnoy.

"It’s fun. I am negotiating all day long."

Coping with the New GREs

If — like me — you are one of those people

who do not particularly enjoy taking standardized tests, the Graduate

Record Examination (GRE) will not be much of a treat. However, there

are ways to get through it successfully, and with a little help and

a lot of practice, you might do well enough to make it to the graduate

school of your choice.

Mercer County Community College (MCCC) is offering a "Graduate

Record Examination Review," starting Thursday, July 8, at 7:10

p.m. at the West Windsor campus. Six Thursday sessions cost $170.

Call 609-586-9446.

MCCC’s GRE Review — offered three times a year — is a good

"crash" course if a crash course is what you are looking for.

But depending only on this course to make you GRE savvy might not

be a good idea, because unless you are an exceptionally good test-taker

you cannot prepare for the GRE in six once-a-week sessions. Also,

the MCCC course is all instructional — you do not do any practice

on a computer. But if you have already started preparing, and you

want some last-minute testbusters and a chance to take some paper

practice exams in a testing environment before you go for the real

thing, this $170 course could be a worthwhile investment.

This is a real "crash" course — in six sessions of about

two and a half hours each, with three classes for the verbal and three

for the quantitative and analytical part — the instructors go

very fast. The English language has too many words and there are just

too many formulas in math to master in so short a time. If you have

no clue about the test at all, or if you have been out of school for

a while but you plan to go to graduate school in the future, this

could be a good introduction.

The fee includes a text with practice exams plus a book

of vocabulary words and formulas. The text is published by Educational

Testing Services (ETS), the "monsters" who make these tests.

Apparently the practice exams are previous GREs. However, as someone

who has used both the ETS workbooks and others in the market, I would

suggest that you study with a Barron’s or an ARCO book. They may be

a little tougher than the actual test, but I found that if I worked

with something harder I did the actual test better. Besides, the ETS

workbook had the explanations along with the answers to only one practice

test. Explanations were especially helpful to me and my ARCO workbook

had the explanations to all the questions in all the sections.

The test I took in April was the last paper-based GRE, and now ETS

offers only the Computer Adaptive Test (CAT). Contrary to popular

conception, the CAT is not the computer version of a paper-based test,

says Robert Cohen, director of the Princeton Review, which also

offers GRE preparation classes. "The computer adaptive test adapts

to your level." CAT starts off with a medium question and if you

get that right, you get a harder question; if you get that wrong you

get an easier question. Your score depends not on how many questions

you get right, but which questions you get right, says Cohen.

GRE preparation classes at the Princeton Review have 11 sessions that

include 10 classroom sessions and four CAT GRE practice tests on the

computer. New sessions start every five weeks, the next session in

Princeton starts on Monday, July 12. Cost is $895, and you can take

the course again free if you are not satisfied with your scores the

first time. Call 609-683-0082 or visit the website at http://www.review.com

for more information and a free practice CAT GRE.

Like the paper-based GRE, the CAT GRE also has six 30-minute sections

— two verbal, two quantitative, and two analytical — and another

"experimental" section that ETS puts in there as an extra

measure of torture. You are only graded for six sections but you do

not know which one is the "experimental" section. So in reality

you have to take seven grueling 30-minute sections, with a 10-minute

break somewhere in between. The extra section can be either verbal,

quantitative, or analytical. You can take a practice CAT GRE on the

ETS website at http://www.gre.org. The actual test costs

$96.

In my GRE course in March the MCCC instructors gave many useful tips

on how to tackle the test. For example, that many colleges do not

really consider your analytical scores. You can call the department

you are planning to attend to find this out and consequently might

be able to spend more time working on your English and math.

As far as crash courses go, the MCCC course is as good as it can get.

Having taken it in March, and having been accepted to the graduate

school of my choice, I would gladly recommend the course. It would

only be fair if I said the course deserves some credit for my accomplishment.

— Teena Chandy


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