Top Stock Picker: Allan J. Knepper

In the first quarter the top performing stock in our members' top picks contest was Lindsay Manufacturing (LNN) selected by member Allan J. Knepper. Congratulations to Allan who has become a lifetime honorary member (i.e. no more yearly membership dues) and will receive a prize check for $150!

Like with previous winners (see 4Q 2007), I asked Allan a few questions about himself, experience, strategy, and lessons he's learned:

NAME: Allan J. Knepper

PROFESSION: I recently retired after 31yrs. from GM Corp. where I held management positions in customer service, training and development, dealership systems and processes and warranty management. I worked both in GM Central Offices in Detroit as well as Field Offices throughout the U.S. I have been a lifelong “gearhead” growing up in a small Iowa town and working in a small Chevrolet dealership in high school while building race cars and eventually earning a BA in Psychology after a tour of duty in the Navy. I currently supplement my small pension by combining my hobby into a very small business buying/repairing/selling antique tractors, trucks and cars. I am also very faithfully supported by my wife of 32yrs., Barbara who still works full time as our church secretary. I have also been fortunate to be able to indulge my passion for conservative policies, leadership, government, capitalism and our popular culture by being chosen for a seat on the Milwaukee Journal Sentinel Reader Advisory Board. After a one year stint, I was then very fortunate to be chosen to spend this year as a Community Columnist. In my writing as in my trading and investing, I struggle to develop the discipline and routine to be successful.

MARKET EXPERIENCE: As my background would suggest, I had absolutely no experience or training in personal financial basics or stock market basics. I did have a 401K at GM and I became very interested in slowly learning to manage it myself. In the downturn of 1987, I quickly realized I was a “value” investor and I began buying cheap stocks in a very small personal account I had opened at a discount broker. I bought things I knew (Pepsi, Goodyear, John Deere etc.) . After being caught up in a huge GM downsizing in 1999, I vowed to ramp up my computer skills to begin on-line researching, investing, trading in my non-401K account. I also set a goal of having at least a small income stream in the future from frequent and/or day-trading in order to be more financially independent.

MARKET STRATEGY: I am a very, very simple, basic investor and trader. I have always tried to do lots of study and simple research and after many losses and lessons learned with “hot stocks” in the early days, I try to stick once again to things I know and can understand what the company does. I therefore stay clear of most tech stocks, biotechs, financials etc. This does obviously limit me but I do try to stick to that discipline. I look for trends but more importantly “second tier” stocks that are not closely followed. During the beginning of the ethanol craze, I did make a little money in the ethanol stocks themselves, but I looked for “undiscovered “ stocks related to the trend (especially in my own backyard). This led me to railroads, railroad equipment, stainless steel, barges, farm equipment, irrigation (LNN), fertilizer etc. I did the same thing early in the “water scarcity” trend. I am currently working on wind energy plays involving towers, equipment, installation services, maintenance and repair service and parts etc. I look at price to book, short interest, 5yr. trends in growth, cash flow etc. I not only buy these stocks for short to medium term gains, but I have been focusing more effort on trading a large, familiar basket of these same kinds of stocks around earnings seasons. This is where my success has been sporadic but steadily improving. Once again, I have no interest in trading well-followed, popular stocks around earnings season, but rather lesser known stocks whose behavior I may have already studied for several years.

MOST IMPORTANT THINGS I HAVE LEARNED: I began being a sporadic WSJ reader in the 1980’s and quickly had a Saturday routine of picking up IBD and Barrons and studying them on the weekend. I have during the last yr. subscribed to Telechart since my chart skills are very basic and limited to those provided by the two online brokers I use. I need to develop better discipline going hand in hand with better daily record-keeping. After mention in Kirk Report, I have recently enrolled in BeSpoke and SentimenTrader. Since discovering Kirk Report in 2006, I have become hooked, especially the links to a wide variety of sources, market commentary, guest Q+A, charting and most of all, a very conservative, disciplined outlook on the big picture of both the markets and life in general. We have been very blessed in having our two daughters be recent graduates of UW Madison ( a special ed. teacher and a real estate developer). Through what I’ve learned both in the Kirk Report and other linked sources, I hope to coach them in the importance of sound money management and the value of beginning to save and invest early in their careers. Thanks again Charles.

Thank you Allan. I'm happy to have you with us and good luck to everyone who is participating in the second quarter contest!