Ken Kam: M100 Master Fund

02/20/2004 12:00 am EST

Focus:

Ken Kam

CEO, Marketocracy, Inc.

Ken Kam runs the Masters 100 Fund, which buys the best ideas of the top performing stock pickers among some 50,000 online investors. Here's a look at Ken's latest top buys, as well as a review of the Masters 100 fund by Mark Skousen, who considers the fund to be his #1 investment.

Says Ken, "We do our research very differently than most. I've learned over time that the people who really understand each industry best are the people within each industry. The market is almost never uniformly good or bad. There are always going to be some parts of the market that will benefit from those things that everyone tells you to be afraid of. No matter what happens in the economy, there are some areas that will benefit and there are people within those industries who know it. Therefore, we monitor the top buys of the top performing investors, following the virtual portfolios on our Marketocracy Web site. We look for those stocks that are being bought by the top-performing investors, while also being sold by the lower-performing investors. We have found that those stocks typically outperform the market by about 20% over the subsequent 16 weeks. Here are a few of the stocks that meet that criteria:

"We have seen a general trend away from tech stocks to small-cap healthcare stocks. Acacia Research CombiMatrix (CBMX NASDAQ), and Orchid Biosciences (ORCH NASDAQ). Both of these are small-cap healthcare companies. They are in a very specialized area where they are applying semiconductor technology to the science of DNA. If you know much about semiconductors, you know that’s a huge business for those companies that dominate parts of this market. I think both of these companies have the ability to do the same in DNA chips. In addition, we also like  LaJolla Pharmaceuticals (LJPC NASDAQ) and Vaso Medical (VASO NASDAQ), where we see the same pattern of the very best investors buying a lot of stock, while everyone else in the universe of investors that we track is selling. Another stock that we are buying that matches this profile is Turkcell (TKC NYSE), which is a Turkish cell phone company that has a 25-year monopoly in that country. Recently we’ve noticed a lot of buying by the very best investors we track, while the rest don’t seem to be aware of this company."

The Masters 100 Fund (MOFQX) remains a top buy recommendation from leading economist, author, teacher, and Money Show speaker–Mark Skousen, editor of Forecasts & Strategies. He says, "I spoke with Ken Kam at The World Money Show and he informed me that since its inception in November 2001, the Master 100 Fund has a daily batting average of 570, meaning that 57% of the time it beats the S&P 500 each day. Meanwhile, Lipper reported that the M100 fund beat the S&P 500 Index 98% of the time in 2003. This is almost unheard of in the mutual fund industry. Additionally, the M100 recorded a 12.4% gain for the fourth quarter 2003, outpacing the S&P 500 Index again. MOFQX has now beaten the market in seven out of eight full quarters since inception. I consider it a #1 investment that belongs as the foundation of your portfolio."

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