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Large-cap Value Manager Is Old-fashioned Stock Picker

Stocks in this article: PG

By Covestor

David Levine started his investing career at age 8 when he bought some silver because he thought it was cheap relative to gold.

"Then I bought some Procter & Gamble (NYSE: PG), and it was clear I didn't understand what I was doing," says Levine, a new manager on Covestor. "I was 11 when the 1987 crash hit. I was watching the market every day. I didn't know what it all meant but the crash started my fascination with the market."

Levine, who manages the Aspect Large Cap Value portfolio, invested for his family and became a broker for Prudential Securities when he was 21. He became disillusioned with being a stockbroker due to what he saw as conflicts of interest, although he continued to invest own money in the type of strategy he now offers on Covestor.

"I've always gravitated to large-cap value stocks," he said. "I have a very strong contrarian bent and I don't like overly complicated businesses."

In Aspect Large Cap Value portfolio, he will almost always hold under 20 securities.

"If you have more stocks than that, you're sort of defeating the purpose of stock picking so you might was well buy an index fund," he notes. Still, he tries to limit individual positions to no more than 15% of the portfolio, to manage risk.

Levine is a student of both fundamental and technical analysis and classifies himself as an old-fashioned stock picker.

His advice to investors after the financial crisis is to focus on looking ahead rather than in the rearview mirror.

"As investors start breaking even 10 years later, they're afraid the same thing could happen to them again," Levine said.

He did note that he's having a tougher time finding bargains in the market. "I have no problem with letting cash pile up a bit if I can't find anything to buy," Levine said. Indeed, Warren Buffett, one of his investing icons, has allowed cash reserves to reportedly grow to $40 billion at Berkshire Hathaway.

Like Buffett, Levine focuses on long-term investments and companies with wide economic moats. He starts with a "top-down" approach focused on which sectors are positioned to perform best in the current economic environment. After that, he conducts “bottom-up” research in attempt to identify companies that offer long-term growth at a reasonable price. He may also use charts to help him time buy and sells, which is where the technical research comes in.

Levine counts Michael Price, Chris Davis, Peter Lynch and Buffett as his favorite investors.

Disclaimer: All investments involve risk and various investment strategies will not always be profitable. Past performance does not guarantee future results.

David Levine

David Levine

I am a value-oriented investor and a former financial adviser for Prudential Securities. I left the industry in 2000 and


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