Five Questions with L. Charles Fuller and Brian G. Carney

L. Charles Fuller is founder, CEO, and managing director of Bridgecreek Investment Management. Fuller is a native Oklahoman who holds a bachelor of arts degree from Oklahoma State University and both a bachelor of arts and a master’s of business administration from the University of Tulsa. Fuller previously worked for the Bank of Oklahoma and Merrill Lynch Asset Management.

Brian G. Carney is founder, chief investment officer, and managing director of Bridgecreek. Carney graduated with a bachelor of arts in business administration from William Jewell College in Liberty, Mo. He has a master’s of business administration from the MJ Neeley School of Business at Texas Christian University. Carney previously worked for the Bank of Oklahoma in Tulsa and JP Morgan Private Bank in Dallas.

1. What is Bridgecreek Investment Management, and how did it get started? What is the firm’s business philosophy?

Brian: Bridgecreek is a boutique money manager focusing on investing funds for high-net-worth individuals, foundations, and corporations in Tulsa, Oklahoma City, and the Dallas/Fort Worth area.

In 2004, Chuck and I recognized the tremendous amount of wealth that was being created in Oklahoma from oil/gas and other industries and the lack of options available in this state. In fact, many of the larger families in Tulsa were going to Dallas, New York, or other markets to find a research-driven firm focusing on individual stock and bond management.

Bridgecreek’s overall business philosophy is to have fewer clients and less bureaucracy so that we can focus all of our time and energy searching for value in the marketplace and visiting with our clients on a regular basis. Currently, we have $350 million of discretionary assets under management and 65 families.

2. How do you explain the recent volatility in the Dow Jones industrial average, and what should it mean for investors?

Chuck: The volatility in the indices can be attributed to the uncertainty investors are feeling about several factors that are currently facing the market.

How the market moves over the short term will be determined by how investors react to the subprime mortgage contagion, inflation, company earnings, as well as Fed policy.

What does this mean for investors? This is the time to stay put, as long as one’s portfolio is well-diversified and allocated in tune with his or her objectives. Poor investment decisions are made in times of stress. We recommend focusing on long-term goals rather than daily price swings.

3. What factors should individuals look for when deciding whether or not to invest in a particular stock?

Brian: Several factors an investor should consider are management, business model, and market leadership.

Our primary factor is the PEG ratio. The price-to-earnings ratio divided by the long-term growth rate tells us as managers whether we are paying too much for a stock.

4. What percentage of a person’s portfolio should be invested in stocks?

Chuck: This is a difficult question because it should be different for each investor based upon their ability to stomach the ups and downs of the stock market.

We manage portfolios fairly conservatively because our clients are also very interested in principal protection, but we do our best to assess the percentage of stocks that each client needs at each different stage and circumstance in their investment life cycle. However, with the 15 percent tax on dividends, we have seen more clients use dividend-paying stocks to help supplement their income rather than bonds.

5. If you could pass along one piece of investment advice to individuals, what would it be?

Chuck: Meeting financial goals is not about chasing returns or trying to hit a home run with a few flyer stocks. It is about balance and diversification. That is why we stress holding many different asset classes in our client portfolios, including large-cap and mid-cap stocks, international equities, corporate and municipal bonds, emerging market bonds, real estate, and commodities.