Rob Sarty, a finance major at the University of Tennessee, has been investing since he was a sophomore in high school. He attributes much of his investing success to his involvement with the National Association of Investors Corporation and reading Peter Lynch’s many books on investing. Sarty is passionate about sharing his experiences with other young people to help them become successful investors!
Sarty has looked to Bill Miller, Peter Lynch, and especially Warren Buffett as people he holds a lot of respect for in investing. Taking from Lynch’s renowned philosophy of only investing in businesses in which you can draw with a crayon what they do, Sarty requires himself to be able to define within one paragraph what a company does before he will even consider purchasing it.
He admits it is actually easier for younger people to find up-and-coming companies to invest in because younger adults are targeted more by such companies including Apple, Quiksilver, Google, Starbucks, American Eagle, and the like. Once he identifies prospective companies, Sarty researches a company’s financial performance, compares it with competitors, and determines if they are trading at a fair price. And, because Sarty likes holding his stocks for the long term, he likes to make sure he doesn’t have to worry about a company’s "existence" over the next five years.
While Sarty admits he has made mistakes in the past, he thinks it is necessary to learn from experience. He cites his biggest mistake as being apt to take a short-term view when buying and following the stocks he owns. Realizing this tendency has allowed Sarty to be more successful now with his 401(k) and other retirement savings.
Sarty believes the key to his success has been his accumulation of investing knowledge through reading anything he can get his hands on. From Smart Money to Better Investing magazine, the Wall Street Journal to his regional business journal, and "The Intelligent Investor" by Benjamin Graham to "Value Investing with the Masters" by Kirk Kazanjian, Sarty has grown as an investor through his reading. He is also an avid viewer of CNBC. Through all of these venues, he is able to identify companies that he truly understands.
To research companies, Sarty visits the Yahoo! Finance, CNBC and CNNfn websites. He looks at financial ratios and comparisons among competitors to help evaluate prospective additions to his portfolio. He also likes visiting the company’s website itself to have a look-see at current news surrounding the company.
The best advice Sarty can give is to start early. It may sound trite by now; but the common thread for most investors is that it takes a little time to work out the kinks in your investing strategy, so starting early helps ensure a leg up. He thinks investing is truly the way to make your money work for you, as opposed to working harder to earn more money.
Sarty has owned stocks including The Cheesecake Factory (CAKE), Ebay (EBAY), Sirius Satellite Radio (SIRI) and Pepsi (PEP). His most successful investments have come from companies in their prime that he was able to purchase at bargain prices, which later grew into well-known public brands. Achieving a 19 percent gain on Ashworth Apparel (ASHW), a 37 percent gain on the Cheesecake Factory and a 70 percent gain Sirius Satellite Radio, Sarty sounds as if he has found a good investing strategy for him. He wishes he would be able to purchase Google (GOOG) and ExxonMobil (EOM), but he has not be able to find them at a bargain price as of yet.
Sarty is a very goal-oriented person and also has a very entrepreneurial spirit. In the future, he could see himself owning an investment firm as well as a commercial real estate company. Sarty says, "I really want to have a million dollars in net worth by the time I am 30."
"If that doesn’t happen, then I guess I can live with 35!" he says jokingly. Although these may sound like lofty goals, setting a road map in any aspect of life and becoming passionate about achieving those goals is the key to happiness.
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