Investor Profile

Name: Walter Rouleau

Origin: Worcester, Mass

Investment Medium: Started the Growth Fund Guide in July of 1968

Accomplishments: returned 24.2% for the one-year period ended July 31, 2002, compared to a 22% decline in the Wilshire 5000. He was one of the top-performers in 2006 and over the past 8 years is up 11.8% annualized vs. 4% for the the total Wilshire 5000.

Style: Value Investing and Hedging Bets In A Bear Market

Approach: He likes to keep things simple, figuring out valuations of markets relative to one another. In 2002 he perceived gold and Asia as undervalued. He was also looking funds that were selling the market short, diversifying and hedging as much as possible.

He likes the Price-Dividend ratio. This evaluates issues based on the dividend, traditionally kept below 37 – examples, 1973, 1987. In the stock mania that ended in 2000 stocks were priced at 94 times!

Case for Gold: Gold has the most value and the most upside potential. Gold moves when people don’t know where to shelter their cash.

Future Market Direction: Although he saw a mini-bull market in the making he remained cautious expecting a decline following that would make a new low. He also pointed out how Japan stagnated incredibly since its inflationary years before 1989 when liquidity and credit was pumped into the market, and that the same may bode for the U.S. economy.

Rouleau believes this U.S. mini-bull market is about over and that there may soon be a “waterfall or crash-type decline” triggered by “some unexpected negative news event.” He still thinks that U.S. “super bear market” that began in the later 1990s will bottom in about 2012.

The above was based on an interview in September 2002 on Forbes, as well as a recent article on Marketwatch.



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