Knowledge is investor's key

Ryan Morris, 25

Occupation: Ex-CEO/founder of VideoNote; now managing partner with Meson Capital Partners

Portfolio: AerCap Holdings N.V., Aircastle Ltd., BofI Holding Inc., KVH Industries Inc., Jackson Hewitt Tax Service Inc.

A varied background

Ryan Morris is one interesting cat. He studied an esoteric field of engineering at Cornell, a combination of applied math and computer science that takes models and tools and applies them to real-world business problems. During that time, he took two breaks, one to work surveying northern Alberta oil fields, and the other to tour Europe by bike.

Why He Loves Investing

"I have a desire to always learn more, and that's totally satisfied by investing," he says. "It's all about understanding how things work and then making portfolio decisions." How He Invests

A value investor, Mr. Morris says it's critical for him not to care what other people think. It's also the key to finding bargains. "It's extremely unlikely you'll find something that's cheap that a lot of people know about and like."

His screen filters include 52-week lows, lots of analysts' sell ratings, really low price-to-earnings and price-to-book ratios, and he also assesses a company's earning power. One example is KVH Industries. A maker of TV antennas for RVs, the stock and business tanked with the economy. But Mr. Morris saw that KVH was working on a high-speed Internet service for ocean-going vessels. "They're by far the low-cost provider, and the stock went up 40 per cent right after I bought it."

Best Move

When the economy crashed, a lot of investors thought aircraft leasing would do the same. But Mr. Ryan's research told him a third of the world's airlines would need to go bankrupt before the sector would take a hit. He bought four public aircraft lessors. Whenever one rose faster than the others, he moved money out if it and into the laggards. The result? A 400-per-cent return in six months.

Worst Move

Chicago-based phone directory publisher R.H. Donnelley looked like just his kind of company. "The problem was all the covenants on the debt and restrictions on what the ratios were allowed to be." Trading was suspended at the end of 2008, and the stock now trades on the pink sheets. Advice

"Don't do anything you don't really fundamentally understand. And don't resort to simple rules, you've got to deeply understand something before you invest in it."

Want to share your strategies?

E-mail tony.martin@sympatico.ca