Subject: [NEXTEL-1] The Sacramento Bee, Calif., Jack Sirard Column

From: [email-masked]
Date: Mon, 02 Jun 2003 18:59:43 -0400

http://cnniw.yellowbrix.com/pages/cnnmoney/Story.nsp?story_id=39215642&ID=cnnmoney&scategory=Business+and+Finance&
--
------------------------ Yahoo! Groups Sponsor ---------------------~-->
Get A Free Psychic Reading! Your Online Answer To Life's Important Questions.
http://us.click.yahoo.com/Lj3uPC/Me7FAA/ySSFAA/61FxlB/TM
---------------------------------------------------------------------~->

Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/ 

IndustryWatch

Aerospace/Defense

Auto

Aviation

Banking

Business and Finance

- Bankruptcy

- Dividends/Earnings

- Executives

- Intellect. Prop.

- Investments

- Investors

- IPO's

- Joint Ventures

- Labor

- Mergers & Acq.

- Mortgages/Loans

- Products

- Reg. and Taxes

- Venture Capital

Chemicals

Computers

Economy/Markets

Energy

Entertainment

Environment

Food

Government

Healthcare

Insurance

Internet

Metals & Minerals

Real Estate

Retail

Small Business

Telecommunications

Transportation

Travel

Utilities

searchIndustryWatch

The Sacramento Bee, Calif., Jack Sirard Column

Source: The Sacramento Bee

Publication date: 2003-06-01

Arrival time: 2003-06-02

Jun. 1--When it comes to managing money, John Montgomery charts his own
course. He draws on years of experience, quantitative analysis and never ever
falls in love with a stock.

That strategy has paid off quite well for the six growth funds that
Montgomery runs for Bridgeway Funds in Houston. His funds earn four-or
five-star ratings from Morningstar and his flagship fund, the Bridgeway
Aggressive Investors 1 (ticker symbol BRAGX), is up 18 percent this year.

Morningstar analyst Bridget Hughes says that investors in the fund do
have to withstand some risk, particularly since Montgomery can put a huge
chunk of money into a single stock.

"While Montgomery will step in to keep the fund reasonably diversified by
sector," she says, "the portfolio doesn't hew to any index, and individual
picks can consume a large percentage of assets. Still, we think this one is
easily a keeper."

Since the fund was launched in August 1994, it has easily topped the S&P
500 index as well as the great majority of equity funds.

Aggressive Investors 1 is now closed to new investors, but the company
has launched Bridgeway Aggressive Investors 2, its relatively new and
basically identical running mate.

Montgomery, who was a successful private investor before launching the
mutual funds, says the stocks in the portfolio "span the style box from large
cap to emerging growth."

"Our funds are distinguished by what we do as much as what we don't do,"
he says. "We don't make or rely on prognostications of the overall economy,
and we don't care about market timing."

Instead, he employs five economic models that are calibrated to beat the
market averages over a rolling three-year time frame.

"We're not worried about the quarterly numbers," he says.

Using the five self-designed, computerized quantitative models also
allows Montgomery to take emotion out of the buy-and-sell process.

Using the distinct economic models, which he keeps to himself, makes for
some interesting stock calls, he says. That's why the portfolio could be
holding both a Ford or a Kodak as well as a small-cap high-tech play.

"There's no real inconsistency there," he says, "as the stocks were not
bought by the same model and statistically these picks are pure."

Unlike a lot of fund managers, Montgomery isn't shy about taking a big
position in a company.

For instance, Nextel Communications is the largest holding in Aggressive
Investors 1, equaling 6.4 percent of the fund's $247 million in assets. Not
surprisingly, it is also the largest holding in Aggressive Investors 2.

"That's (6.4 percent) a bit high, but I'm prepared to invest up to 10
percent if characteristics of the stock are good."

That translates into a stock that he says would have very low downside
risk and a high probability of rising in value.

For a stock such as Nextel, Montgomery says, "it's in a sector
(telecommunications) that's all beat up, following a huge peak during the
boom. It had a big-time run-up in price until 2000, but since then has come
way back down."

Now, the fundamentals have turned around, and the company has made money
for the past year, he says. "And, of course, the valuation (stock price) is a
lot leaner."

Among its other top holdings are the likes of Apollo Group, Western
Digital, Amazon, Adtran and Corinthian Colleges. All are well into positive
territory this year.

Another risk that investors have to consider is the huge role that
Montgomery serves at Bridgeway. If he were unable to continue leading the
funds, is there a master strategist waiting in the wings?

One thing that I particularly like about the fund family is that
Bridgeway Funds has made it a part of its corporate culture to regularly
donate half of profits from its fee structure to local and national charities.

That clearly separates the fund family from the rest of Wall Street as it
has done with its relatively strong performance over the years.

The Bee's Jack Sirard can be reached at (916) 321-1041 or
[email-masked].

-----

To see more of The Sacramento Bee, or to subscribe to the newspaper, go to
http://www.sacbee.com

(c) 2003, The Sacramento Bee, Calif. Distributed by Knight Ridder/Tribune
Business News.

BRAGX, F, EK, NXTL, APOL, WDC, AMZN, COCO,

Publication date: 2003-06-01

© 2003, YellowBrix, Inc.