Is it a coincidence that the people who have been able to conquer the stock market this year are as drab and conservative as Warren Buffett’s brown suit?

I don’t think so.

It seems the winners in a bear market do indeed drink Cherry Cokes (like Buffett, the world’s greatest investor), wear brown suits (like Buffett), live in grey houses (like Buffett), drive Saturns (like Buffett’s kids), are not the life of the party (like Buffett’s Berkshire Hathaway shareholders), have far too much common sense (like Buffett) and shop at Liquidation World and own the stock (like Buffett might do one day).

Joe and Jan Flamboyant – the ones quaffing frappuccinos at Starbucks, driving fire-engine red sports cars, sporting Hawaiian shirts, living in penthouses, reading the Wall Street Journal and shopping online – don’t have a chance in hell of beating this market.



(If this also fits the profile of your investment adviser, he’s probably been averaging down on Cell-Loc. Fire him.)

Boring people buy boring companies with boring names in boring businesses. The only sexy thing about these companies is the stock price.

The dot-bomb investor thinks these companies are too simple. He’d rather own a business he can’t get his head around.

Sometimes, the best investment is one that seems so simple it’s ridiculous. A year ago, I was cursing in a long lineup at Liquidation World when I should have been checking the stock price, which was $5 at the time and has since doubled.

At the same time, those titillating dot-coms like Book4golf.com, Cell-Loc and Wi-Lan have been in a freefall, all down 95 per cent or more from year highs.

Legendary fund manager Peter Lynch, in his book One Up On Wall Street, tells of how people are constantly stumbling over hot investments in everyday life that the so-called smart money on Wall Street hasn’t noticed. The book was released in 1989 (OK, I’m a slow reader).

Lynch, vice-chairman of Fidelity Management & Research, calls it “the power of common knowledge.”

I remember tripping over a pyramid of spring water in 7-Eleven a couple of years ago. I bought the Classic Selection, liked the taste, researched the manufacturer, Stonepoint Group, e-mailed the company and had the CEO himself reply within minutes, bought the penny stock and watched it triple in no time.

Lynch provides numerous anecdotes of how people stumble over potential fortunes, usually without knowing it. One of his hottest tips came from his wife, who told him about how she loved L’eggs pantyhose that was sold at supermarket checkouts in egg-shaped containers.

Lynch got a six-bagger on the stock in Hanes, the company with the L’eggs product, before the company was taken over and now encourages his wife to shop more.

So simplicity may be the watchword in these bearish times.

Face it, if a company has sex appeal and a topless receptionist, you might want to look elsewhere and spend the money on something as dull as Warren Buffett’s suit.

Me, I’m going to Liquidation World. Maybe they’ve got a brown suit that fits.

PRO'S THREE STARS

Yorkton oil-and-gas analyst Andrew Hogg continues to covet Canadian Natural Resources (CNQ-TSE), one of his top picks in the column six months ago.

“I’d say it’s one of the best-run companies in Canada in its sector,” says Hogg.

At a recent price of $42.30, the stock has dipped almost 12 per cent since Hogg recommended it in February. He rates it a “top pick” – the highest rating Yorkton gives stocks on its scale of five – with a 12-month target of $65. The stock’s year range is $37.25-$56.20.

Hogg’s other “top picks” are PanCanadian Energy (PCE-TSE), which is being spun off from Canadian Pacific, and Southward Energy (SWN-TSE).

“We think PanCanadian has one of the best asset bases amongst the seniors, especially considering its unique and powerful free-hold land base,” says Hogg.

“And we believe it will show the biggest growth among the seniors with gas production set to double over the next four to five years.”

PanCanadian’s recent price is $36.25 (year range, $36.25-$36.39).

Hogg projects Southward Energy (recent price, $5.25, year range, $3.25-$9.25) as a stock with huge upside potential, giving it a 12-month target of $12.

“It has a proven growth strategy that is being implemented with obsession. We see the company as well positioned to add further growth through both exploration drilling and exploitation drilling as well as complementary acquisitions which we expect them to start showing within the next 12 months.”

Yorkton is forecasting an average oil price of $25 US per barrel for 2002.

“That’s a conservative outlook,” says Hogg. “We think a price of $27 to $28 is what will happen so we’re relatively bullish on oil. Our outlook for natural gas for next year is $3.25 US (mcf-per thousand cubic feet). Right now, we foresee short-term weakness in natural-gas prices.”

Hogg continues to rate Canadian Hunter Exploration, one of his previous picks, as a “top pick.”

Hogg’s Record: -2.2 per cent (Genesis +30.4 per cent based on takeover price of $18.25, Canadian Natural -11.9%, Canadian Hunter -25.1 per cent).

CHEERS: To local business icons the Southern family, the owners of Spruce Meadows who have taken a gutsy stand against the Canadian Equestrian Association’s decision to include repeat drug user Eric Lamaze on the Canadian team in this week’s Masters.

JEERS: To Conrad Black, whose ego would not allow him to admit defeat when Lou Dobbs on CNN Money Line quizzed him about his recent sale of his 50-per-cent stake in the National Post, his disastrous investment.

HOT ALBERTA STOCK: Tiberon Minerals

TBR-CDNX $1.65 Up 27 cents (+19.6%) on 132,900 shares (for week ending Aug. 31)
If you wanted a solid play, tungsten, the hardest metal, was the play of the week. Calgary-based Tiberon believes its exploration program in North Vietnam has the potential to become the world's largest open-pit tungsten mine and investors were betting on it, giving the stock a nice push in a turbulent stock market. Tungsten, a market dominated by China since the mid-1980s, is used for drill bits, gold clubs, tungsten light bulbs and small-calibre ammunition.

COLD ALBERTA STOCK: Ventus Energy

VTU-TSE $4.40 Down $2.50 (-36.2%) on 434,832 shares (for week ending Aug. 31)
Ventus shares were hammered when it was announced that the company's planned merger with Petrobank Energy was put on hold due to falling production at Ventus's wells, significantly lowering the value of its oil and gas reserves. A meeting between the companies was also postponed. Petrobank shares remained steady at $1.37, up two cents for the week.