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Byline: Ken Hoover
Investor's Business Daily
First Source Monogram Special Equity Fund invests in small companies that are growing quickly. Many of its picks are undiscovered or largely ignored by stockanalysts.
Manager Brian Bythrow, 33, throws some other techniques into the mix. He uses stock charts to help him pick buy and sell points. And he cuts his losses if a stock drops after he buys it.
If that sounds familiar to IBD readers, it's because Bythrow follo
ws some of the teachings of William O'Neil, IBD's founder and chairman. Bythrowsays he learned about O'Neil's strategy at another mutual fund company, now defunct, where Bythrow worked as an analyst. O'Neil's strategy was used as a tool there. But not as the primary stock-picking strategy.
Bythrow departs from O'Neil's philosophy by insisting his stocks be cheap. He wants a stock with a growth rate that is expected to be at least twice its forward-looking price-earnings ratio. O'Neil downplays the usefulness of P-E ratios or other valuation measures.