Corrections or additions?
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,"
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.
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
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,"
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.
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."
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
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
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:
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.
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
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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