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Partner: Bill Mathews - The Cheap Investor

Question: Tell us something about yourself.

BM: I am the founder and editor of The CHEAP Investor newsletter. Since 1981 the newsletter has helped tens of thousands of investors make profitable investment decisions. For more than 15 years I taught business and investment courses at Triton College. I also taught securities analysis for the MBA program at Keller Graduate School of Management. Over the years, I've been a frequent guest on radio and television shows nationwide such as CNBC. I've also been interviewed by many major newspapers and magazines including the Wall Street Journal, Business Week, Barron's and the Chicago Tribune.

Question: In each issue you recommend a few companies. On what basis do you select a company?

BM: I am basically a fundamental analyst. I look for stocks that have increasing sales and earnings but are selling near its 52-week low. Primarily I'm looking for a stock that has the potential to move at least 50 to 100% or more over the next year.

Question: Now that we have bought a stock. How do you decide it's time to sell?

BM: Generally I don't give sell recommendations in the newsletter because we have different types of investors - traders, short term and long term investors. Each type of investor can have a different sell target. There are some major events that can indicate it's time to sell and take your profit. This would include the company announcing a reverse stock split or an overall change in the company's fundamentals such as issuing more shares, negative financials or a merger. When something like that happens, I review it to see if it's in the best interests of the shareholders. If it isn't, it may be time to sell. I devote 2/3 of my monthly issue to updates of previous recommendations giving an updated analysis of the company.

Question: What aspect do you like best about your newsletter.

BM: While I'm sure my subscribers would say they like my stock recommendations. I have special passion for my editorial, which appears on the first page of the newsletter. After teaching investments for many years, the editorial is my opportunity to teach my subscribers about the market, economy and how to make wiser investment decisions. For example, with the market at recent lows, in my March editorial I wrote "Many investors are making a major mistake by letting the fear of a short-term event color their long-term investment decisions… In fact, we'll look back at this time and wish we had invested more money when the stock prices were so low." Now that the market is hitting new highs, I'm certain that subscribers who took my advice and bought when stocks were so cheap are smiling all the way to the bank.

Question: Can you name a few of your biggest winners?

BM: Here's a chart of some of my superstars.

Cheap Investor's Top 20 Superstars:

Stock Name Symbol Rec. Price High Price Profit (%)
IDEC Pharm. IDPH $5 $222 4340%
Hauppauge Digital HAUP 2.84 96 3280
Pre-Paid Legal PPD 1.31 44 3259
Bradley Pharma. BDY 1.03 31.43 2951
Republic Industries RSG 3 88.5 2850
CarMax Inc. KMX 1.56 39.3 2419
Avagen Inc. AVGN 3.63 89 2352
Benihana BNHNA 0.75 16.5 2100
Horizon Healthcare BUYOUT 1.5 30 1900
Arrow Electronics ARW 3.75 72 1820
Argosy Gaming AGY 2.25 42 1767
Emerson Radio MSN 0.44 7.94 1705
Autobytel ABTL 0.7 10.2 1357
Neoware NWRE 1.56 22 1310
Artisoft ASFT 1.75 24.18 1282
Varco International VRC 5.38 68.5 1173
Mobility Electronics MOBE 0.79 8.69 1000
PetSmart PETM 2.5 24.17 867
Acres Gaming AGAM 1.22 11.5 843
Medical Action MDCI 2.53 23 809

Question: What do you do in free time?

BM: Ahh, my free time…I like to bicycle. I live very close to a bike path that hooks up with other paths. I can pedal about 50 miles in any direction. In addition I enjoy hiking in the woods. My wife also likes to keep me busy working in the garden.

Question: What was your first job?

BM: My first job was delivering newspapers when I was 11. That job taught me how hard it was to earn money and how to make that money go further. I also learned the importance of saving for a rainy day. I still remember how proud I was when I saved enough to buy a new bike.

Question: What did you want to become as a child?

BM: When I was young, I wanted to be a cartoonist because I liked to make people laugh. Even though I outgrew that career choice, I still believe it's important to have humor in your life.

Question: What's your motto?

BM: I think J. Paul Getty said it best in his book, How to be Rich, when he stated, "Buy when everyone else is selling and hold until everyone else is buying. This is more than a catchy slogan. It is the very essence of successful investment and accumulating wealth." I've adopted that as my motto and it's worked very well for over 23 years in good markets and bad.


Info on 'The CHEAP Investor'

For over 22 years, The CHEAP Investor newsletter has made its subscribers money by recommending bargain stocks. The newsletter researches numerous companies to find the select few turnaround or little-known quality companies with good increasing sales and earnings that are selling at or near their 52-week low price. Each 12-page monthly issue contains 3 or 4 buy recommendations, updates on previous recommendations along with excellent market and economic analysis.


Subscription Information

1 year subscription to address in U.S. costs $145
1 year subscription + The Hotline Servive costs $195.

For a FREE ISSUE or subscription

The Cheap Investor
3 Golf Center, Suit 404
Hoffman Estates,Il. 60169
Phone: 847-697-5666
Fax: 847-697-5699

e-mail: mathewsandassoc@sbcglobal.net

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