SECOND TEAM Michael Goldstein Empirical Research Partners
Michael Goldstein, who spent the past four years in first place, slips one notch to No. 2 (but tops the roster in Portfolio Strategy). Over the past year the Empirical Research Partners strategist has emphasized investing in growth stocks at a reasonable price, determined by a combination of variables such as valuation with reinvestment rates. Apropos of that, Goldstein compiled a portfolio of what he dubbed the Distrusted Fifty — companies that market participants think “misinvest” capital. “The idea is to find large-cap growth stocks that rank well in our proprietary model, have high rates of earnings reinvestment and low discounted earnings growth relative to their reinvestment rates,” he explains. Health care services providers and technology stocks are favored in this portfolio, which outperformed the Standard & Poor’s 500 index by 5 percentage points year-to-date through August, Goldstein says. “Mike’s terrific,” says one backer. “Sure, some of the other quant analysts are good, and they’re interesting, but they’re kids. He’s been doing this a long time, so you don’t see the hubris that others have.”