"Introduce new valuation ratio for Internet sector: price-to-fantasy." - Kevin M. Johnson, partner and director of research, Aronson + Partners
"Never sell short a stock with no capital letters in its name." - Martha E. Ortiz, partner and director of trading, Aronson + Partners
Those Internet-inspired New Year's resolutions from employees of Aronson + Partners, Philadelphia, came about because "whatever rules there have been about buying stocks have gone out the window for Internet stocks," said their boss, Theodore R. Aronson.
The firm manages about $2 billion in a long-short strategy and is "long a lot of stocks and short a lot of stocks," said Mr. Aronson.
The 1999 New Year's resolutions of money managers, pension fund executives and investment advisers cover a wide range of subjects, some serious and some not so serious.
Scott Lummer, chief investment officer of 401k Forum Inc., San Francisco, has resolved to keep closer tabs on Alan Greenspan and the Federal Reserve Board. It seems that two of the Fed's 1998 interest rate cuts coincided with speeches Mr. Lummer was giving before industry groups. The first time, the Fed cut interest rates just three minutes before his speech began. The second time, the cut occurred during his speech.
"I was sandbagged (after the speeches) by questions from people in the audience who had somehow heard about the cuts," he said.
Seth Glickenhaus, chief investment officer of Glickenhaus & Co., New York, says he's been consorting with the devil. He resolves to take any advantage this gives him in business "to be more selective in finding cheaper stocks for my clients and do more trading" in order to buy on weakness.
William F. Quinn, president of AMR Investment Services, Fort Worth, Texas, which oversees American Airline's $11 billion in pension assets, says his resolution is to make the company's $2.8 billion 401(k) plan "more user friendly for participants."
To do this, AMR is adding more investment options, including three pre-mixed lifestyle funds and three new mutual funds - a Standard & Poor's 500 index fund, a small-cap equity fund and an intermediate-term bond fund. The fund also is going to a daily valuation, which will help participants keep closer tabs on their money.
Tom Schlossberg, president of Diversified Investment Advisors, Purchase, N.Y., expects 1999 to be "a difficult year" for the stock market. So his resolution is to provide 401(k) plan clients with the kind of "communication and support our customers will need to get through the year without jeopardizing their financial security" - e.g. invest for the long haul, don't time the market.
Avoiding market timing is also part of the New Year's resolution of Robert Stovall, president of Stovall/Twenty-First Advisors, Inc., New York.
In 1996, he had predicted the Dow Jones industrial average would hit "10,000 by 2000." Even though he thinks it may actually happen in 1999, he still has concerns about the overall market, and so has resolved to"buy on dips - or else you get left behind."
Peter Stonberg, head of active U.S. equity strategies at State Street Global Advisors, Boston, said his 1999 resolution is to make sure institutional investors are aware of his firm's equity investment strategies.
For example, the firm has "a very strong long-short market neutral product that has had double digit absolute returns over the last three years," said Mr. Stonberg, and he resolves to make people more aware of it.
Rick Nelson, managing director and head of structured equity at J.P. Morgan & Co., New York, has resolved to "educate investors on the benefits of enhanced index funds." Morgan's enhanced index product "has done well in a more volatile market environment. It eliminates the losers of the S&P 500 and adds the winners," he said.
He expects to "spend a fair amount of time (in 1999) speaking at conferences, talking about risk control," and explaining that enhanced index funds "have less risk than traditional active management."
The resolution of Robert Gish, director of the $6.6 billion New Mexico Public Employees Retirement Association, might also fall under the "wish" category. "I want to find a provider of securities lending services who will prepare an accurate and detailed flow chart of the securities lending process from beginning to end on a step-by-step basis," he said.
The New Mexico fund has been involved in securities lending for about three years "and I've heard a lot of explanations and haven't seen a meaningful chart yet," he said.
"I want someone who will chart the process from beginning to end in a nice, clean, meaningful (way)," said Mr. Gish.
