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Author: kahunacfa Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2569  
Subject: FAQ Date: 1/19/2008 2:52 PM
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KahunaCFA’s Investment Musings – FAQ

Q1: Why did I start this message board at TMF?
1. It is a place to “think-out-loud” about new investment ideas.
2. It is a place to get feedback about those ideas from other Fools.
3. It is a place to write about the investment process.
4. It is a place to share new investment ideas, mine as well as other’s.
5. Board started May 2007 as my paralegal classes for the Spring 2007 term ended.

Q2: Who is Kahuna,CFA – Resume with “Real Name" Removed:

Kahuna, CFA


2006- Pres. Paralegal Research Associate. Perform legal research in support of a litigation practice.

1995 – Pres. SCORE Counselor. Volunteer with the Service Corps of Retired Executives; actively consult with small business clients who come to SCORE for help with their operating or proposed businesses. Review and help with business plans and prepare the clients to meet with potential investors and lenders. Also staff, one afternoon per week, a call-in counselor help desk where business information and advice is provided to clients of SCORE Chapter 19. In addition to face-to-face business counseling activities, also provide business counseling through the SCORE Cyber-Chapter over the Internet.

1992-1995 Venture Capital Portfolio Manager.
Responsible for the monitoring and reporting of monthly investment results for the $165
Million direct placement portfolio. Reporting was directly to the Direct Placement Subcommittee of the Board of Trustees. Responsible for the on going investment and legal decisions affecting this portfolio. Through the fiscal year end, June 1995, the portfolio produced a compound annualized rate of return of 58.4%. This represents a dramatic turn-around in investment performance from low single digit returns and significant ($165 million) asset write-offs recorded over the previous five years.

1991-1992 Investment Analyst/Institutional Sales, B.C. Christopher Division of Fahnestock & Co.
Provided an Institutional equity research product, which was also distributed to the retail sales force of the firm.

1989-1991 President, Special Situations Research Associates. Operating as a division of a small,
Independent Regional Brokerage firm, provided an Institutional Research Product covering special situations within the technology sector of the investment universe. During 1990, purchase recommendations appreciated over 40% while sale recommendations declined nearly 70%. Completed series 7 and series 63 regulatory examinations.

1985-1989 Vice President, Robert W. Baird & Co. Worked as a fundamental securities analyst covering Mid-west Technology Companies as well as other technology companies of investment interest. Accomplishments included the attraction of a significant number of new institutional clients to the firm because of my research efforts. The last four recommendations appreciated from 36% to 78% over varying periods of 6 to 12 months.

KahunaCFA Resume
Page 2

1983-1985 Vice President, Portfolio Manager, Large Insurance Company.
Worked as a portfolio manager for outside pension fund clients of the insurance company. Managed two portfolios, which provided superior investment returns when measured against the S&P 500 index. One commingled fund was a balanced portfolio; the other was an all equity portfolio. In addition to the management of publicly traded securities, monitored and managed a combination of venture capital partnerships and direct private placement equity investments. Participated in the marketing of investment management services and was directly responsible for the acquisition of several new pension clients.

1980-1983 Senior Analyst, Large Investment Management Company. Acted as the senior analyst for a broad range of technology companies including computer hardware, software, and telecommunications equipment and electronics companies. Significant accomplishments included the institution of a covered call writing program, and the start-up of a venture capital investment program for the Pension Plan including the selection of several direct placement investments.

1976-1980 Investment Analyst, Large Insurance Company. Worked as a fundamental securities analyst covering the food and beverage, healthcare, office equipment electronic and telecommunications industries. In addition to research coverage of specific industry sectors, participated in the preparation of economic analysis and the formulation of investment strategy. Compiled an excellent performance record for investment recommendations. Purchase recommendation produced a mean annualized return of forty five percent. During the same period, sale recommendations produced a mean annualized return of negative four- percent.

1975-1976 Investment Analyst, American Family Insurance, Madison, Wisconsin. Worked part
time as a fundamental securities analyst following companies of special investment interest. In addition to specific investment recommendation, provided an analysis of the economic situation along with investment policy implications.

1973-1975 Systems Analyst, University of Wisconsin Center System, Madison, Wisconsin. Designed and implemented a successful automated student records processing system.

1969-1972 Systems Analyst/Project Manager, Staff Commander in Chief Pacific, Honolulu, Hawaii. Managed and directed projects relating to Nuclear Targeting Systems and the Current Intelligence and Indications Center. Advanced in rank from second lieutenant to captain.


2006-2008 Paralegal Certificate (In Process) December 2008. GPA = 4.0

1978-1980 CFA Institute CFA Charter

1974-1976 Master of Science, Finance, University of Wisconsin, Madison. Concentrated in
Investments, Modern Portfolio Theory, and Macroeconomics with an emphasis on quantitative methods. GPA = 3.5

1972-1974 Bachelor of Business Administration, Finance, University of Wisconsin, Madison.
Concentration included Economics, Investments, and Security Analysis.

Q3: How to invest?

My answer, because this is part of how I learned:

1. Read:
a. The Intelligent Investor by Benjamin Graham.
b. Security Analysis, 1934 edition by Graham, Dodd, & Cottle.
c. Jim Cramer's Real Money by James J. Cramer (Bought & read in 2007)

2. Take this outstanding course http://www.uwasap.org. I took that course during the 1974-1975 academic year.

3. Make mistakes - you will, I did and still do; learn from them.

4. Know when you have an investment competitive advantage derived from these sources: a. An informational advantage, sometimes possible but exceedingly rare, b. An analytical advantage where your analytical skills exceed those of other investors, difficult to acquire, but possible with study and insight and experience. c. Third know thyself, your skills, temperament, and risk tolerance.

Kahuna, CFA

My Investment Process:

Generate a potential new investment idea. These ideas can come from anywhere: Reading an article in a newspaper, a comment by another Fool on a MF message board, seeing an advertisement for an new product that looks interesting and promising, or virtually anywhere.

Step One: Go to a Library and obtain a Value Line® Report on the company. Cost about ten cents.
Step Two: Read the report, and send off to the company for an Investor Information package.
Step Three: Read the materials make notes of questions and file the information & notes.
Step Four: Call the company Investor with questions.
Step Five: Build an earnings model for the company & make projections.
Step Six: Visit the company meet with IR Contact, CEO, and CFO -if possible.
Step Seven: Compute the Intrinsic Value of the company’s stock.
Step Eight: If the Intrinsic value of the company is significantly higher than the market price buy shares. Establish a sell target – usually four times the initial price in 3 to 5 years. This is a holding period return of 32% to 58.7% compounded over the three to five year holding period.
Step Nine: Track and monitor the company’s progress and conformance to projections.
Step Ten: When the stock price = 4 X cost sell 25% keep the rest, maybe.

©2008 Kahuna, CFA – Permission freely granted to reproduce on TMF web-site cited as (KahunaCFA’s Investment Musings FAQ, Kahuna, CFA)
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