John Lawlor
John Lawlor
Occupation
Semi-retired
The portfolio
More than 30 stocks, including Canadian banks, several REITs, pipelines, utilities and telecoms; other investments include U.S. companies in health care and other industries that are underrepresented in Canada.
The investor
John Lawlor has spent the last half of his 43-year business career as vice-president of investor relations for public companies such as Nortel Networks Inc. and Cognos Inc. Now he keeps busy with part-time consulting work and personal hobbies, the primary one being stock-market investing.
How he invests
When Mr. Lawlor was working as an investor-relations executive, he talked to institutional portfolio managers daily. From this experience, he came to the realization that individual investors with long-term horizons have an edge over professional money managers.
The pros were evaluated quarterly or annually and under pressure to make many buy and sell decisions within short periods of time – which increases costs and judgment errors. Individual investors are not under such pressure to swing at so many pitches.
Mr. Lawlor has found that a long-term horizon helps him deal with the "inevitable market gyrations." By keeping a focus on the market's tendency to deliver positive returns over the long run, he is able to "tune out the noise" of the day.
Mr. Lawlor's portfolio is made up of stable, large-cap companies. "As I am semi-retired … capital preservation is inviolable," he explains. "I don't need to hit home runs."
Being semi-retired also gives him a preference for income, so his stocks usually pay dividends. With their tax efficiency, they fit in well with his goal to maximize income on a net basis.
Growing dividends are sought. A company with a commitment to growing its dividend usually has a culture of continuous improvement and optimizing shareholder value.
In addition, he also seeks to buy stocks at value prices – being sure to consider not only the company's assets but its growth potential as well. Moreover, he believes that his approach of screening for companies paying solid dividends yielding more than 3 per cent "is a value tilt in disguise."
Over the course of his professional career, Mr. Lawlor says he has worked with nine different CEOs. "For me, the most critical criterion is the quality of management … Look for strong leaders. They attract and retain strong talent …"
Best move
It was finding, some 25 years ago, his current approach, which can be summed up as "long-term, large-cap, dividend-growth and value-oriented."
Worst move
Taking 20 years to find his current approach.
Advice
"Psychology – not market strategy – is the main reason investors lose money. … We have to immunize our emotions to those periods when we will temporarily lose money."
Want to be in Me and My Money? Contact Larry MacDonald at mccolumn@yahoo.com or his website