This Eye Surgeon's Health Care Portfolio Is Up 32% in 12 Months

NEW YORK (TheStreet) -- Eye doctor by day, market-beating portfolio manager during his lunch hour: meet Dr. Robert Freedland of La Crosse, Wis.

"I really have a hard time discussing stocks with my wife, because she's not an investment person at all," Freedland says. "So if I tell her I have a stock that's gone up 40% she says, 'Sell it!' Because she probably thinks like everybody else does that what the hell do I know: if it went up it must be a mistake."

If that's true, Freedland has been making a lot of the right kind of mistakes of late.

The health care portfolio he manages was up 32.2% over the past year as of Friday, beating both the S&P 500 and the S&P Health Care index over the same period.

With characteristic humility, Freedland attributes the health care portfolio's success to "being in the right place at the right time."

"I'd like to say I'm incredibly brilliant and … nobody else could have done it and I'm the next Peter Lynch, but reality is the health care sector's been very, very strong," he says.

Freedland made his first investment, in a company called Global Marine, with $300 he got for his bar mitzvah.

"It turned out I bought the stock within a quarter point of its historic high." Freedland recalls. As he recalls, the same week he bought the stock, the company announced it would suspend its exploration for gold in Alaska. He is fairly sure he sold it in the teens.

Despite that experience, Freedland still frequently likes to go for stocks on an upward trend.

"I always tell people my technical idea of a good stock is a chart that on the left side is lower than the right side. I've learned a certain amount of humility where people say, 'Look at this, this stock has come down 40%. Isn't this a time to buy it? What a buy!' And I say I'd rather buy a stock that's up 40%"

He estimates he's written about some 2,000 stocks on his blog. One of his favorites of late is VASCO Data Security International (VDSI) .

VASCO provides Internet security for financial institutions, which seems like a great business to be in these days.

"Whether it's Target (TGT) one week or Home Depot (D) the next week or JPMorgan Chase (JPM) the next week, I don't know where these hackers are but I don't think data's very secure at all," Freedland says.

The market clearly agrees, which is why VASCO shares are up some 238% year to date. With the stock priced at more than 40 times earnings, it is fair to ask how much further it can go. That doesn't bother Freedland. If it goes down, he'll sell it.

"I've developed a philosophy of selling my losing stocks quickly and completely, and my gaining stocks slowly and partially."

Freedland doesn't get very technical with his investing strategy. He likes Apple (AAPL) , for example, for the simple reason that the iPhone 6 is so popular people have to wait weeks or even months in some cases to get one.

His father was also an amateur stock picker who offered such pearls of wisdom as "buy anything with General in its name." Other tips from his dad: when in a restaurant, see who makes the sugar packets. At the grocery store, see which company makes most of the products. An investment in this vein Freedland has held for a while is Church & Dwight (CHD) , maker of Arm & Hammer products.

"It's amazing that you can put Arm & Hammer on toothpaste and you can also put it on laundry detergent and cat litter -- and get away with it," Freedland quips.

Freedland's strategy has worked well enough to gain him a following on a website called Covestor, where investors pay to mirror his trades. He manages four different portfolios for the site, and his health care portfolio is the second-most-followed out of more than 140 Covestor portfolios.

"For me it's very exciting. But I worry about those people," he says of his investor/followers. "I don't want them to lose money."

Despite the success of the health care portfolio, Freedland's three other portfolios have been less successful at beating market indices. And since its inception on Oct. 6, 2010, Freedland's health care portfolio has lagged the S&P Health Care index.

He is well aware of what he refers to as the "why bother" question when it comes to investing.

"In order words, why not just throw all your money in an index fund and just forget about it?" Freedland asks rhetorically.

His answer is that "for those of us who are passionate investors, we are always in search of the Holy Grail, which is to beat the index. It's almost as if the pursuit is as much fun as the result."

But perhaps because he knows how difficult it is to beat an index, or perhaps because he doesn't want his wife blaming him for losing their money, or perhaps for some other reason, Freedland lets professional money managers oversee the bulk of his family's assets. He does this despite the fact that he occasionally outperforms them.

"I don't have a real good explanation to tell you why I wouldn't just take over all my own investments," he says, but he seems to have settled upon the idea that it is more responsible to let others do that job for now, especially while he remains a full-time eye surgeon.

There's that humility again. It even extends to another one of his hobbies: collecting PEZ dispensers.

"It's so unprofessional to be collecting PEZ," Freedland says.

Follow @dan_freed

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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