Community Spotlight: Raymond Saleeby
33+ years buy side money manager for around $300M assets in separately managed accounts
Ray Saleeby has been investing professionally since 1982, first in the St. Louis firm of R. Rowland Company, then in a small, more progressive firm before moving out on his own in 2001 to pursue his investment vision. Ray is very passionate about helping clients meet or exceed their goals, objectives & dreams, employing six associates to provide full service to his clientele. He enjoys doing his own research, reading over 60 periodicals a month.
Can you tell us about the history of the firm and your investment background?
With 34 years of investment experience, I have been through many investment cycles and gained valuable knowledge and experience to distinguish myself from other financial advisors. I formed Saleeby & Associates because I feel passionately that I must be able to invest wherever I can get the best return with the least amount of risk for my clients. At the very start of my career, one of the first investments I was encouraged to share with my clients was a relatively illiquid investment. I vowed then and there to perform my own research and due diligence, selecting investments that would afford my clients an optimal return for their acceptable level of risk. While I am knowledgeable about a broad range of investment choices, the vast majority of my portfolio is concentrated in equities, both domestic and international.
How would you describe your investment strategy?
My unique investment approach is based on value investing. I strive to buy equities from sustainable businesses with a competitive advantage, which are mostly low cost producers or those with stable customer bases. I focus on companies that generate free cash flow, which can be used to buy back stock, pay dividends, make acquisitions, and reduce debt that ultimately benefit the shareholder. I look for companies with high barriers to entry or wide economic moats that naturally restrict new entrants. I further define myself as a contrarian by looking for companies that appear to have been overlooked by market investors but nonetheless possess great turnaround potential. For these companies, the philosophy is generally to buy stock when Wall Street is recommending a sell position and sell when Wall Street is recommending you to buy. These businesses generally sell at a discount to their intrinsic value, which sometimes offer up to 40-50% discounts. While there is usually a precipitating event that has caused one of these companies to fall out of favor (such as a poorly executed merger or weak product rollout), if I believe the organization can be rectified or someone else can positively change it then I am likely to buy while my peers are still in 'wait and see' mode.
I believe a diversified portfolio is important to be successful in the market. Most portfolios under my management hold less than 10% in a particular stock to ensure stock fluctuations do not adversely affect the portfolio to a great extent. On a rare occasion, I may feel comfortable breaking this 10% barrier if I have enough trust in a company, organization, management, accounting, and/or financials.
What makes your strategies so different versus your peers?
Most advisors are told to follow the firm's research. The thinking is that is what the firm's analysts are there for. Many are further incented to place clients in the company's mutual funds and other financial instruments. I do it the old fashioned way; it involves patience, extensive research, contacting companies all over the world weekly, going through many investment cycles to get a better understanding of what seems to work in the situation over time and listening carefully to clients to understand their risk tolerance and match their individual portfolio to their specific objectives, rather than plug them in one of a handful of model portfolio strategies.
