Whenever I speak to Josef Schachter, I think of Mrs. Gump (Sally Field) in Forrest Gump telling Forrest (Tom Hanks): "Life is like a box of chocolates, Forrest, you never know what you're gonna get."

It's the same when you quiz Schachter of Schachter Asset Management Inc. about his prized stock picks. You never know what you're gonna get - except Schachter seems to know.

In February, the artful Calgary stock picker introduced Business Edge readers to an original flavour in the Pro's 3 Stars feature when he touted something called Tyler Resources.

Josef Schachter

I couldn't help thinking at the time that maybe the Edge's veteran home-run hitter's aggressive style would finally catch up with him. Schachter was the Edge's stock picker of the year for 2003 with a stunning 69.7-per-cent return, so you figured he was due for a strikeout.

Tyler (TSXV:TYS), then at 28.5 cents, was already up more than 1,000 per cent from its 52-week low. It was a Mexican copper play and at the time, copper stocks were looking poised to catch their breath after a mad dash in 2003.

And you had to wonder what a self-described oil and gas guy was doing picking a speculative mining stock in oil town - and one on the volatile TSX Venture Exchange, to boot.

Well, once again, the bow-tied stock-picking contrarian has belted one out of the park for a home run to capture honours as the Edge's top stock picker for 2004. Schachter repeats on the strength of Tyler Resources, which recently traded at 79 cents with the company in the midst of an extensive drilling program, a 177.2-per-cent return since it was Schachter's third star on Feb. 19.

Schachter also picked Tyler more recently at 36 cents and, combined with a basket of stellar oil and gas winners, the 32-year veteran pro investor finished first by a nose over John Ing of Maison Placements Canada. Ironically, Schachter provides oil and gas research for Maison.

Schachter's nine picks had gained 62.9 per cent through Nov. 26 while Ing's six picks were up 60.5 per cent on the strength of an even bigger winner than Tyler. Ing's gem was pick-of-the-year Centurion Energy International (TSX:CUX), up 242.8 per cent since it was one of his top picks in March.

While the majority of pro investors tend to follow the herd of analysts and fund managers, Schachter has a penchant for identifying winners before they become headlines, or has the audacity to buy stocks when sentiment reaches rock bottom, as he did with Nortel Networks (TSX:NT) in 2003.

While Schachter, a chartered financial accountant, is more comfortable researching oil and gas stocks where he excels in identifying CEOs with star-studded track records, he uses an extensive pipeline to latch on to prospects outside the sector.

"In the case of non-oil and gas stocks like Tyler Resources, it becomes a networking game where you talk to smart people and friends," says Schachter. "You give them good oil ideas and they often call you back with recommendations. In the case of Tyler, I met with the management (Jim Devonshire is the CEO) and the play looked quite legitimate. Since then, of course, they've been making things happen (with positive drill results)." And Schachter, whose family owns shares in Tyler, says he isn't selling yet.

"This company has had this play for 10 years while awaiting the right environment (of higher copper prices) at about $1.40 US per pound, and now they've got the right environment (with copper at its recent price of $1.43 US per pound). As they get more drilling results, this could still be anywhere from a $2-$10 story (stock price)." Besides Tyler, Schachter boasts six other winners, all oil and gas stocks, including True Energy (TSX:TUI), which returned 123.8 per cent. His other winners were Canadian Superior Energy (TSX:SNG), Vaquero Energy (TSX:VAQ), Devlan Exploration (TSX:DXI), Olympic Energy (since acquired by Provident Energy Trust) and Accrete Energy (TSX:GZ).

Schachter's lone loser was Endev Energy (TSX:ENE), down 13 per cent.

Ing, a renowned gold bug, ironically enjoyed only modest returns on his gold picks, Goldcorp (TSX:G) and Crystallex International (TSX:KRY), while his big winners were energy plays Centurion, True and Canadian Superior.

Ross Healy, CEO of Strategic Analysis Corp., had the third-best Edge record with his eight stock picks up 31 per cent, thanks to splendid runs by Teck Corp. (TSX:TEK.A), up 80.2 per cent, and Canadian Natural Resources (TSX:CNQ), up 57.9 per cent.

Schachter attributes a lot of his success to his accounting background.

"I'm a value guy and I believe in spending time looking into things that are in the gutter or not being looked at," he says. "You do your homework and, when you think the stock has become fully valued, you sell it. You learn a lot when you've been through enough bear markets and heard all the stories and the lies and seen the Enron disaster." Schachter continues to be bullish on the oil and gas sector for 2005. True Energy remains his top pick among domestic producers and Centurion is his top international play. Among other oil and gas stocks he covets are Devlan Exploration, Find Energy (TSX:FE) and High Point Resources (TSX:HPR).

"The reality is that good management continues to succeed in the oil and gas sector and you really haven't had an expansion of multiples that you should get at some point for trophy managements." So what's Schachter's latest contrarian play?

"I like Nortel again and I've been buying it in the $4 range," says Schachter. "In spite of the cloud over the release of corporate results, the company is still selling (products) day to day. If you did the same nasty investigation of every company in Canada, I think you'd find a lot of the same (accounting) problems. I ask the questions, 'Are they a good operating business, do they have products that customers want and do they have a balance sheet to make sure they can execute?' And to me the answer is yes on all three questions." Overall, the featured stocks in Pro's 3 Stars have returned 14.4 per cent year to date while the S&P/TSX Index is up about nine per cent, the Dow Jones Industrial less than one per cent, the S&P 500 about three per cent and the Nasdaq about five per cent.

* SAGE WORDS: "Buy your straw hats in winter."

- Investment legend Bernard Baruch

HOT STOCK: Leader Capital Corp. TSXV:LDR $1.20 Up $1.17 (+3,900%) Leader has literally blown away all other comers on the Venture this year with an astonishing 39-fold increase, largely on its subsidiary Leader Wind Corporation's plans to build a wind farm in southern Ontario. Leader came out of the gate in '04 at three cents and charged as high as $1.80 before settling back at $1.20. The Toronto company also is a player in the residential real estate market.

COLD STOCK: Afton Food Group. TSXV:AFF $.005 (yes, that's half a cent!)

Down 251/2 cents (-98.1%) Afton, which went under creditor protection in July, confessed in a press release that its shares have no economic value. No kidding. In other words, you might want to take any bids at half a penny (unless your commission outweighs the value of your shares) and who knows? You may have enough dough to buy yourself a doughnut or a slice of pizza as a tribute to the Burlington, Ont.-based operator of Robin's Donuts and 241 Pizza.

(Gyle Konotopetz can be reached at gyle@businessedge.ca)