A Conversation with Gerry Frigon

For further insight into the classic growth stock theory of investing, we share some quotations from an actual conversation with longtime money manager Gerry Frigon, President and CIO of Taylor Frigon Capital Management:

"No one knows what they're doing, when they're trying to time the market. We've never done that. . ."

"Wealth is never created unless you're an owner. Wall Street has sold a line of bull that there's a magic to picking this trend or that trend, the idea that 'We know better.' And this has been reinforced by the twenty-four hour financial news cycle. Built into the system is a sense of inadequacy in the investor, that they need this intermediary to know all this special lingo and stuff. It all reinforces the whole delusion that they [Wall Street] know something that someone else doesn't."

"There's no magic to this. Stop relying on the witch doctors of the financial world. Common sense is the best guide: what are the businesses we want to own? The paradigms that are changing?"

"Historically, solid businesses end up surviving. Deworsification just showed that it blows up. We aren't saying don't diversify, but the bill of goods that people have been sold that 'alternative investments,' and 'commodities trackers,' and 'international this and that and the other' will prevent a decline from being too bad has been shown to be just that -- a bill of goods."

"In terms of diversification, you're going to be wrong about things, and you have to put yourself in the position where you don't get slaughtered, but also where you can make some money when you're right, as opposed to the 'mass-managed money' and 'own everything' approach."

"Everyone's looking for an algorithm to beat the market, but the answer to the question of 'who's going to innovate next?' is something no economist or algorithm can tell you."

For posts which touch on some of the concepts discussed in the above conversation, see:

• "Stock market guessing" 12/01/2008.

• "The business of America is business" 10/16/2008.

• "Look for paradigm shifts, part 2" 04/23/2009.
  

• "Deworsification" 12/11/2007.

• "What about commodities???" 03/31/2008.

• "Managing investments in the new era" 02/18/2009.

• "Beware of the witch doctors of modern finance" 12/15/2008.

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