Contrarian targets independent thinking, not wild speculation

The following appeared in the July 9, 2010, edition of The Globe and Mail.

Me and my money
‘Not buying into anything without a track record’

By Larry MacDonald

Benj Gallander, 53

Occupation: Co-editor of the Contra the Heard Investment Letter

Portfolio: Stock holdings include ATS Automation Tooling Systems Inc., Brick Brewing Co. Ltd., Hartco Inc., FranklinCovey Co., Hemisphere GPS Inc., Intertape Polymer Group Inc., Liquidation World Inc., MBIA Inc., Mitec Telecom Inc., NII Norsat International Inc., General Electric Co., Theragenics Corp., Viterra Inc., and Zarlink Semiconductor Inc.

How he invests:

Benj Gallander is primarily a contrarian investor. “I seek out-of-favour value plays that have the ability to return to form for home runs and grand slams,” he says.

But they aren’t wild speculations. “All of the enterprises have been in existence for at least 10 years, so I am not buying into anything without a track record,” he adds. Mr. Gallander also believes in diversification, avoiding margin debt, and having money invested outside of stocks in “safer investments such as GICs.”

Recent move:

He recently purchased shares in National Bank of Greece between $2.38 and $3.01. “While it could go bankrupt and dilution is certainly a risk, odds are that it will survive and eventually thrive again,” Mr. Gallander says. “Plus, if it does, the dividend will likely be re-established.”

Best move:

“Purchasing the Bank of Ireland at $1.66 during the worst phase of the financial meltdown; seven months later I was selling for a ten-bagger at $16.60.”

Worst move:

“Major mistakes were sticking with both Abitibi and Cygnal Technologies when there were lots of indications that they should have been sold. I should have taken my haircuts and moved on before being scalped.”


“If one chooses to look for ‘safe’ stocks with expected returns around 10 to 20 per cent as many brokers and analysts recommend, the results will generally be quite feeble.

“Remember that while some stock brokers and financial advisers are excellent, many act primarily as sales people and tend to offer what is hot, often close to, or after, the stale date.

“They often do this not only because their firms are pushing specific products but because if they are wrong, at least they can take comfort that they are incorrect in a group. Independent thinking and choosing unpopular positions will lead to better returns.

“No one cares as much about your money as you do and it is worthwhile reading widely to have the capacity to make your own investments decisions, or at least ask educated questions. Investing is not rocket science… .”