CHRISTOPHER REES
AGE: 57
OCCUPATION: Self-taught investor living off his investment portfolio. PORTFOLIO: Deep-value and special-situation stocks, recent picks being Dell Inc., Micron Technology Inc. and Penn West Energy Trust.
HOW HE GOT STARTED
Christopher Rees's journey to becoming an investor whose portfolio would one day outperform that of Warren Buffett began in 1966 when he left his Stony Stratford home in England at the age of 16 to travel the world. His parents thought he would be back in time for supper.
He ended up wandering the globe for more than two decades, working as a tailor in Afghanistan, cook in India and charter-boat captain in the Caribbean (to name a few of the jobs). While working as a night waiter in Florida, he began studying stocks at the local library, becoming manager of his own portfolio in 1986.
His dream was to retire to the Dominican Republic and live off his investment portfolio. That's where he resides now, on the north coast, with his wife and four-year-old daughter.
On Oct. 1, 2000, Mr. Rees set up a virtual portfolio on marketocracy.com under the name tenstocks.com. As of March 3, it has returned 31.5 per cent on an annualized basis. By comparison, class B shares in Mr. Buffett's Berkshire Hathaway Inc., gained close to 13 per cent annually over the same period (and the average annual increase in the S&P 500 index was only 1.7 per cent).
HOW HE DOES IT
Like his investing hero, Warren Buffett, Mr. Rees searches out value situations and runs a concentrated portfolio to focus on his best ideas. He believes in Mr. Buffett's No. 1 rule about not losing money and only invests if he feels certain the downside risk is minimal. What distinguishes Mr. Rees is his devotion to stock picking. It's a labour of love that occupies eight to 14 hours of his day. "I enjoy it. It suits my character. I'm a natural researcher, blessed with acute curiosity. I love digging," he told VentureBeat, a U.S. trade publication for the venture capital industry.
BEST MOVE
His best move was buying shares in Elan Corp. on a plunge to $3 (U.S.) from $30. The company's multiple-sclerosis drug, Tysabri, got pulled off the market after some side effects were discovered. But anyone taking the time to read the medical reports could see that the side effects arose only when Tysabri was used in combination with other immunosuppressant drugs.
WORST MOVE
His biggest failure was a 100-per-cent loss in Flag Telecom shares. He thought the underlying hard assets were worth more than what the company was selling. In bankruptcy protection, the assets were written down to nearly zero, leaving nothing for shareholders.
WHAT'S NEXT
Mr. Rees hopes to parlay his track record on marketocracy.com into a lucrative sideline. His website, tenstocks.com, invites visitors to subscribe to his portfolio moves for $5,000 a year. But "if at any time you are unhappy with our service, we will refund your $5,000, no questions asked," the website says.