A Shark Tale
INVESTING by Mark Gordon | Managing Editor
Jim DePorre turned his personal adversityinto an American success story by balancing risks. He leans more toward taking them.
It sounds like a classic country music song: Jim DePorre was going about his life 15 years ago, a married, 30-something accountant and tax lawyer in Ann Arbor, Mich. That's when his hearing began to leave him.
And then, a few months later, what little hearing ability DePorre had left was totally gone, the result of a genetic condition. Next up in the leaving DePorre department: His job, his wife and just about all his money. No word on his dog.
"I was really depressed," DePorre says. "I had no idea what I was going to do."
But this story has a happy second verse. Using disability checks and some money he scrounged together from family and friends, DePorre put together a fund to make some stock trades in the mid-1990s, just as the day-trading craze was about to take off.
DePorre quickly doubled, then tripled his return. "Eventually," he says, "I had made $1 million."
DePorre, who has since moved to Anna Maria Island, has also made a happy second life for himself. He runs both a Bradenton-based money management firm and www.sharkinvesting.com., a stock market advice Web site where he teaches people his brand of aggressive, yet conservative, self-proclaimed shark-style investing. DePorre also regularly writes columns posted on www.realmoney.com, a financial Web site run by bombastic stock picker Jim Cramer.
DePorre now hopes the happy verses keep coming.
His first book, "Invest Like a Shark: How a Deaf Guy with No Job and Limited Capital Made a Fortune Investing in the Stock Market," was published and released by Financial Times Press in October. DePorre begins a national book tour later this month to promote it, where scheduled stops include New York City for appearances on Cramer's TV show, as well as the Fox Business News Channel.
"So many people out there talking about the stock market don't actually do it," says DePorre, who now hears with the aid of cochlear implants. "I wanted people to see real life examples."
Those examples revolve around what DePorre considers investing through controlled aggression and, just like a shark, being able to move quickly and decisively. That is, DePorre says, with the right information and analysis, an investor should be prepared to buy often and sell often. This includes even shorting stocks when the timing is right.
DePorre says the famous Wall Street buy-and-hold concept, a traditional and successful long-term individual investing strategy, is actually infamous. It's also not necessarily the best way for individual investors, no matter the size of their portfolio, to participate in the stock market, he says. "You can buy a lot of really [risky] stocks," DePorre says, "but do it in a conservative way."
DePorre's shark investing concepts have several secondary principles, too, some of which are more in-tune with Wall Street's more established practices. He devotes a chapter in his book to utilizing charts, for example, and he also recommends investors follow a sound and simple money management system, as well as maintain a diversified portfolio to balance any risks.
How to pick 'em
Jim DePorre's favorite stocks, he says, are the ones "that tend to be undiscovered and not really known." Unknown tends to be more risky, DePorre acknowledges, but that only makes the returns sweeter.
Two of DePorre's current picks are a mix on that philosophy: One, Universal Insurance Holdings, is pretty much universally unknown, while the other Microsoft, is pretty much known throughout the universe.
DePorre currently likes Microsoft because the company's recent history, in its share price and financials, show it might be in for a rise. Microsoft shares have been trading in the mid-$30 range the past few weeks; its 52-week high is $37.50
Universal, a Fort Lauderdale-based insurance firm that writes mostly homeowners policies, is more DePorre's speed. The company has high margins and returns and since it's relatively low-priced, with shares trading for under $8, DePorre believes it has a big upside. The company trades on the Amex exchange under the ticker symbol UVE.