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NEW
YORK (CNNfn) - Breaking down a 2-3 zone defense and breaking down a
quarterly financial statement are not as different as you might think.
Just ask Jimmy Black, the former University of North Carolina player and
college basketball coach, now a financial adviser for regional
investment firm Morgan Keegan & Co.
"There is a tremendous parallel in athletics and in business," says
Black, who helps clients tailor investment portfolios from his office in
Durham, N.C. "Both are extremely competitive. Most athletes want some
challenge in their professional lives."
These days, picking winning stocks has become as challenging as
advancing to the Final Four of the NCAA men's basketball tournament,
which kicks off Thursday. Seeking some wisdom in these trying times, we
turned to a quartet of former tourney participants turned investment
pros for their game plan.
Black joined the Morgan Keegan team after a hoops career highlighted by
North Carolina's victory over Georgetown in the 1982 NCAA championship
game. Black was the point guard on a Tar
Heels squad that also included Michael Jordan and future NBA
stars James Worthy and Sam Perkins. Black started his storied senior
season by gracing the cover of Sports Illustrated with Perkins,
Worthy and current UNC coach Matt Doherty.
After being drafted and then cut by the New Jersey Nets, Black became an
assistant coach at St. Joseph's, South Carolina and then Notre Dame. But
after 14 years of coaching college kids, he gained his investment
certifications and began coaching clients in how to add value to their
portfolios.
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WHAT
THE PLAYERS LIKE |
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Jimmy Black: Cisco Systems, BMC Software, Corning, Cree
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Doug Elstun: Andrx, Sun, Network Appliance, Calpine, Americredit
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Tim Mullen: Finova, Conseco, Kinder Morgan, Cendant
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John Hummer: Wind River Systems |
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Like
Black, Doug Elstun spent a few years as a Tar Heel before finishing his
college career at the
University of Kansas. He too
wrapped up his senior season in an NCAA title game, but came out on the
losing end of the 1991 finale to North Carolina's archrival, Duke.
Armed with an economics degree, Elstun pursued his childhood dream by
joining an investment firm -- William Larmer & Associates in Overland
Park, Kan. -- that catered to athletes. Under the guidance of his boss,
Bill Larmer, Elstun used his hoops connections to land such clients as
former UNC teammate and current L.A. Lakers forward Rick Fox, Utah Jazz
forward Danny Manning, Dallas Mavericks guard Steve Nash and retired
major league pitcher Jimmy Key.
Elstun builds a base for most of his clients with mutual funds -- he
currently favors mid-cap funds -- and then fills out up to 20 percent of
a portfolio with individual stocks.
Coming off the bench to offer a contrarian outlook on the stock market
is
University of Virginia alumnus
Tim Mullen. Mullen, a sharpshooting southpaw guard, played in three NCAA
tourneys for the Cavaliers and made it all the way to the Final Four as
a junior in 1984 before heading into hedge funds.
Mullen started out doing odd jobs at a New York City hedge fund where
his brother worked. In exchange for a chance to learn the business,
Mullen called investment banks to check on impending deals and analyzed
bankruptcies. After adding an MBA at Columbia, Mullen spent a few years
at a firm that specialized in risk arbitrage, the practice of profiting
from spread between the market price and the asking price of a takeover
or spinoff.
All those years studying deals gave Mullen an appreciation for
distressed companies whose stock prices have been socked by financial
difficulties. He has put that "buying what everyone else hates" approach
to work in the investment and trust group of the Charlottesville, Va.,
startup Virginia National Bank.
"There are opportunities across the distressed and default areas," says
Mullen, who currently has his eye on
Finova (FNV:
Research,
Estimates), a financial services
firm heavily in debt that is expected to come out of a restructuring in
much better shape. He also likes beaten-down financial services outfit
Conseco (CNC:
Research,
Estimates), pipeline operator
Kinder Morgan (KMI:
Research,
Estimates) and
Cendant (CD:
Research,
Estimates), a conglomerate that
was decimated by an accounting scandal but is now back making solid
acquisitions.
No
March Madness story would be complete without mentioning a Cinderella
story and for that we turn to venture capitalist and Princeton grad John
Hummer. Just as teams like
Princeton that do not give out
athletic scholarships must do battle in the tournament with big-budget
state universities, so too do startup companies like Napster vie for
business against established blue chip firms. Napster is just one of
dozens Hummer has funded as a partner at the Silicon Valley VC firm
Hummer-Winblad.
Prior to managing nearly a billion dollars in the firm's five venture
funds, Hummer made a living on the hardwood. Hummer, who played forward
and center, led Princeton to the 1969 Ivy League championship and a
berth in the NCAA tournament. He then spent six years with the NBA's
Seattle Supersonics before earning an MBA from
Stanford.
Coming out of Stanford in 1983 around the time Apple Computer was first
making waves, Hummer caught the VC bug. By 1989, he had made enough
connections to found Hummer-Winblad.
But Hummer is more cautious on the overall stock market. "I remember
1987 and 1973-74," he says. "I have seen this movie before and it could
stay bad for longer than most people think." |