Other Partners


Partner: John Gay - The Quiet Investor

Question: Tell us something about yourself.

JG: Born Oct 1,1930, reared in Chicago. ST. Ignatius High School, John Carroll U (BA) Cleveland, OH; U of Detroit (MA) where I taught English under teaching fellow program. Into the Army, 1954-56. And into the business world as a methods and procedures analyst with Kaisere Aluminum and later with Prudential Ins. Then into the brokerage business in 1958 with NYSE member McDonnell and Co as a registered representative and later manager of a Chicago office. McDonnell began to fail and I took most of my brokers to Reynolds (later Dean Witter Reynolds). Left in 1975 to become trader on Chicago Board Options Exchange for two years. Then left financial community to start my own business in filtration industry, and sold the business after 15 years to "retire".

Question: How long has your newsletter been in business?

JG: I then began the Quiet Investor newsletter, specializing in microcap investments - January 1993. Our belief is that many good opportunities are present in that arena, although one must filter out the garbage and scams and unrealistic development schemes. To do that, I run each interesting company through a 12 point screen to see how it measures up. None pass all 12 tests, but we can determine if the missing items can be fixed or overweighted by its other good qualities. If there is still reason to be interested, we call management and talk to one of the top officers. How they talk helps determine whether we want to pursue the inquiry. A lot of reading is involved and many companies are rejected before we run across something that we think can triple in three years-- our standard minimum requirement for presentation to our subscribers. In the small cap sector, trying to buy companies for small percentage gains is not worth while. An eventual triple should be a minimum target.

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

JG: We find these little companies by scouring the Amex, NASDAQ and NASDAQ small cap stock tables. We look for low price stocks -- those out of favor, fallen angels, and companies with a good story to tell. We skip development stage companies; too many never develop. We will occasionally pick one from the Bulletin Board: with the Internet able to bring up any stock with a symbol, visibility is far greater than before for these little companies.

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

JG: Selling is a more difficult assignment, partly overcome by the 25% chance that our company will be bought by a bigger entity. Fully a quarter of our stocks have been picked up by other companies, often at a good premium. Otherwise, we suggest selling a half of a position when it has tripled, thereby taking care of the original outlay and a bit for taxes. The balance can then be retained to see how far it can go. We also occasionally sell something outright if the rise has been quite fast or "excessive" in our opinion. Sometimes we sell because the management fails to live up to its promise, and sometimes because there is too little accomplished in the time we've given it.

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

JG: I enjoy putting the Quiet Investor together. It is fun to search out good little companies that generate nice profits for investors from their efforts and strategies and products. It is good to hear subscribers say they made money in something we dug up for them.

Question: Can you tell us a few of your biggest successes?

JG: We've had some nice success, the list was up 97% at the last Report Card in September. We have a report card in January, May and September to let folks scrutinize our performance. It keeps them informed and us humble. Among the winners were Enzo Biochem, Glacier Water, Hancock Fabrics, Stake Technology, Advanced Mktg, Helen of Troy, Lifeline, US Physical Therapy. They were all very low priced when recommended, and made nice returns. We've cut several of them loose since they made their move.

Question: What do you do in your free time?

JG: Free time is spent traveling, reading, some running (but no longer in marathons) gardening and playing bridge and Scrabble.

Question: What was your first job?

JG: My first job was in 7th grade working for a florist. I got 25c an hour which I thought was great, as ice cream cones were only a nickel.

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

JG: Journalism and writing was an early goal, and I guess I meandered back to it in these latter years.

Question: What's your motto?

JG: I guess my motto would be, "Put your head down and keep on running."


Info on 'The Quiet Investor'

The Quiet Investor

The Quiet Investor brings smaller and generally unrecognized companies to the attention of investors for above average capital appreciation. Generally too small for institutional investors, they permit individual investors to get there first. Our target is a triple in price within three years. We update recommendations periodically as new developments occur. We provide an eleven point screen for subscribers to use in weighing the attractiveness of a recommendation and give company addresses so you can get their annual reports. We issue a report card on all recommendations three times a year so you can track our success.


Subscription Information

1 year $60
2 years $100

For a FREE ISSUE or subscription

The Quiet Investor
32 Kyle Ct.
Willowbrook, IL 60527
Phone: 630-654-1254
Fax: 630-323-9489

e-mail: quietinvestor@flash.net

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