Hunt for Stocks With `Modest Expectations' Pays Off for John W. Rogers Jr.
Merrill Lynch & Co. has its bull. Dreyfus Corp. has its lion. And money manager John W. Rogers Jr. has his turtle. Sometimes he wishes he didn't. A sketch of the symbolic turtle adorns the masthead of his newsletter, The Patient Investor. Not surprisingly, magazine photographers often ask Rogers to pose for pictures with live turtles.</br></br>As it turns out, the turtles Rogers has met are anything but patient. When he was being photographed for the cover of Black Enterprise magazine recently, Rogers said, "I had to spend the day getting the turtle to stand still - so they could get just the right shot."</br></br>Turtles aside, there is nothing slow or plodding about Rogers's career. At 34, he is the president of Ariel Capital Management Inc., a Chicago-based, minority-owned firm that manages $2.2 billion in mutual fund and pension fund money. But Rogers's meteoric rise didn't come about because he was selling some hot new stock market strategy. Just the opposite.</br></br>Rogers's investment strategy is pure and simple, and worth studying. He will invest only in well-run companies that have strong managers and quality products, he said. And he refuses to pay a lot for his stocks. He likes stocks selling at a modest 11 times their earnings for the coming year.</br></br>Rogers, who developed a fascination with stocks as a young man, said he came to the conclusion early in his career that the best chance to make money was to buy stocks for which there were only "modest expectations." This was generally true of companies that were not closely followed by Wall Street analysts, he said.