Canada

Francis Chou's bottom-fishing puts him among top stock and bond investors. He is one of Canada's most successful mutual fund managers and also one of the most modest. At the age of 51, Francis Chou is in charge of $1.2-billion of other people's money. He is both a top stock picker and a record-setting bond manager.

Success and a tidy personal fortune have come to Mr. Chou through a remarkable odyssey. Born in India, he immigrated to Canada in 1976, got a job as a telephone repair man for Bell Canada and worked for seven years, during which time he discovered the legendary Ben Graham, co-author, with David Dodd, of Security Analysis, the book that established value investing as a discipline.

Over the next five years, the Canadian stock market will offer more risk than reward, says Keith Graham, lead portfolio manager of the AGF Canadian Real Value Fund. On the bright side, it will be a period when his style of value investing will shine, while the "closet indexers" and assorted lemmings get their comeuppance.

"I'm historically a very cautious investor," says Graham. "I believe the key to growing capital, or ending up with the most money at the end of the day, is not losing any along the way -- the old first rule of investing."

Although the global equity market rose sharply in 2006, traditional value manager Templeton Investment Management is still finding bargains in key areas and sectors of the world, says Norm Boersma, executive vice-president, who is based in Toronto.

"The overall valuation level of the market is not excessive," says Boersma, who manages global equity portfolios worth some $10-billion, mainly for pension funds.

Furthermore, he notes, investor optimism is rightly being tempered by concerns about the potential for slowing world economic growth.

Colleague Peter Moeschter, senior vice-president, who specializes in North America and is lead manager of the Templeton Canadian Stock Fund, reports that he continues to find value in areas of the Canadian equity market that were overlooked in the rush to buy natural resources and financial services stocks over the past few years. Thus, he has, for example, found bargains in the information technology and consumer related sectors.

Dynamic fund in top 1% of Canadian equity portfolios. For mutual fund manager David Taylor, the past 12 months have been very good indeed. His Dynamic Canadian Value Class Fund turned in a 37.8-per-cent this year, putting it in the top 1 per cent of all Canadian equity portfolios. What's more, its 29-per-cent average annual compound return for the three years ended Nov. 30, also put it into the top 1 per cent of the 663 mutual funds in the Canadian equity sector.

How does he do it? He buys stuff that other investors shun."I buy when others sell," he said. "If I can be reasonably confident that a company will revive, I will buy its stock even if it's being sold by others who are panicking. The world does not move in straight lines. That is just group think. Once other investors have played on their emotions, I am there to pick up money they have left on the table."