Q: You're a veteran fund manager with 30 years managing money in the aggressive growth category. What is your outlook after nearly four years of a bear market, especially for high-growth issues?

A: It's better to make money than to lose money. Bear markets take many years of hard work. There is nothing you can do about it unless you go to cash.

Q: I notice the cash level is very low. Is that how you defended the fund against the bear market?

A: No, we did not. Recently we were able to take that position. Initially, we were not able to. People did not want us to move to cash in 2000 and 2001. Finally in late 2002, they said we tend to agree that the market could be in for some lower prices. For the first couple of years they wanted us to be fully invested, so we did. It basically wasn't the right thing to do but that is in retrospect.

Q: According to the literature, you use a computer screening method as part of the stock selection process. Can you elaborate?

A: We look at four basic things. We want to see earnings growth quarter over quarter. If earnings aren't going up, we don't buy the stock. We then look at the current ratio of the company. We like to see companies have a current ratio of two-to-one or better, or above the industry average. We get that industry average from various publications, such as Value Line. We look at debt to equity, the less debt the better. Even with all the corporate scandals, we still like to see ownership by management ranking 5%, maybe 15 to 20% of the equity. We run it through a simple screen and make a decision whether we want to buy or sell that issue. Ninety percent of the selection process is fundamental. The other 10 is technical. By technical, we’ll pull up a chart of a company; find out how many shares it trades a day, look at the basic trend it's been in. It's not very hard to determine. We like to buy them when the trend is going up and we will only buy stocks when there is enough volume involved. A lot of times we come across companies that trade maybe a thousand shares a day. If we want to buy 10,000 or 20,000 shares we can't do it. So we like to see companies that trade maybe to 50,000 to 100,000 shares minimum. On the low end, very seldom do we buy stock that trades less than 50,000 shares a day. Volume is a very important part of the equation. I want to see some sponsorship. That is the main reason why we look at charts.

Q: The turnover in last 12 months was over 300%. Is that due to the computer- screening model or to raising cash?

A: That was due to raising cash. Typically our turnover ratio is about 150% to 170%. We totally liquidated the portfolio at the back end of last year.

Q: Have you started putting that cash to work?

A: To a small degree. We're very interested in this quarter's earnings. We're keeping a close eye on companies that look good and are interested in picking up some of these. We certainly hope the numbers look good. Of course, not all of them will, but some companies should meet our criteria. We're anxious to put the money to work. I like being invested in the markets and I like bull markets.

Q: The data I have of your holdings shows a concentration in semiconductor stocks. Have you done any switching?

A: We were in those expecting a bounce in technology and Nasdaq stocks. We didn't get a bounce in some of those issues. We’re basically not in a lot of those now. We're more into healthcare companies like C. R. Bard, Cooper Companies.

Q: Those are medical device stocks. The sector has been bullish since July when more than two dozen from the group hit 52-week lows practically on the same day. What is driving them?

A: Part of the reason is demographics. Of course, earnings are holding in there nicely. That's what we're seeing. That's why we like the companies.

Q: The healthcare industry is divided into many subsectors. Are there other groups in which the fund is concentrated?

A: We're just starting to put money into these, like Bard and Cooper. Also Immuncor that has applications for blood banks and clinical labs. We're also in Odyssey Healthcare, which is hospice services and Pharmaceutical Resources, a generic drug maker. Those are some of the names.

Q: Are there any other sectors that look promising to a growth fund manager?

A: Because of the anemic economy, we think about some of the discount retailers like Ninety-Nine Cents Stores, Target. We don't own these yet but we keep a close eye on them. People will be shopping for the bargains.

Q: In terms of holding periods, what is the rough objective?

A: As long as possible. As long as earnings keep improving, we'll hang on to them. We have no set time.