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A value manager at Janus
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February 15, 2000: 7:37 a.m. ET
David Decker, manager of new value fund, explains his investing strategy
By Staff Writer Martine Costello
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NEW YORK (CNNfn) - If you want to understand the kind of value stocks that Janus Funds manager David Decker likes to buy, consider his story about a small casino off the Las Vegas Strip.
Decker, of Janus Special Situations Fund, had discovered Station Casinos (STN: Research, Estimates) about 18 months ago when Wall Street was worrying about overcapacity on the Strip. Casino stocks were lagging, but Decker saw something different at Station.
Also in this column: Retirement investors are getting aggressive.
"What people on Wall Street didn't recognize is Station isn't on the Strip -- it caters to the locals," Decker recalled recently. "Station caters to people who live in Las Vegas. And the city is growing rapidly."
He bought the stock at 8, and it's selling around 21 these days.
Decker is heading up the new Janus Strategic Value Fund that is in a month-long subscription period through Feb. 29. While he's not saying what he's buying -- and he wants it clear the Station example isn't a recommendation to buy the stock -- his record at Special Situations might give an idea of where he'll look.
Special Situations, with $1.42 billion in assets, is up 1.2 percent year to date as of Jan. 31, according to Chicago fund-tracker Morningstar. It earned 64 percent in 1999 and has a three-year annualized return of 46.32 percent, Morningstar said.
You might think that Decker is something of a lonely man at Janus, a fund giant known for its passion for big, expensive stocks such as Microsoft. While Decker acknowledged that the perception that Janus is a growth shop, he insists that the company look beyond the high-fliers.
Unlike other value managers, Decker doesn't look at the p/e, or the price-earnings ratio. (The p/e is the stock price divided by the earnings per share. Microsoft has a p/e of 65, while a dogged value stock might have a p/e of less than 10).
"I don't think that's a relevant statistic," Decker said. "Valuing it relative to something else is not the way to value a company. I don't buy something just because it's cheap."
That seems to at least open the door to the possibility that Janus Strategic Value will be less like a traditional value fund, and more like Bill Miller's Legg Mason Value Trust. Miller's fund has owned stocks such as Amazon.com (AMZN: Research, Estimates) and America Online (AOL: Research, Estimates), and he's among the few managers who have pummeled the S&P 500 year after year.
"I'm not saying I'm going to buy AOL or not," Decker said. "I think Bill Miller has done an excellent job of recognizing the fact that valuation is not a simplistic exercise."
And unlike other value managers, Decker won't rule out Internet stocks.
"Many Internet companies this fund won't own," Decker said. "But the Internet is a very, very important part of the economy going forward, and if I can find unique value with downside protection in an Internet stock, I will buy it."
The fund will also look anywhere in the world for stocks. Again, he's not getting specific, but in the Special Opportunities Fund, 20 percent of the portfolio is in international stocks. He's found good values in Canada, China, India and Singapore.
"There are great investing opportunities all over the world, and I am looking for any place with great value," Decker said. "I don't want to be pinned in. I will look anywhere."
With the stock market smashing new records all the time, it seems as though retirement investors are getting pretty bullish, too.
Steve Schneider, manager of retirement services at Strong Funds, said one of the most vivid trends he's seeing is that investors aren't afraid of taking some risks.
"People of all ages are investing a lot more aggressively," Schneider said recently. "When the market goes down, people are expecting a quick rebound."
Ten years ago, the situation in retirement investing was a lot different, Schneider said. People were overly cautious back then, preferring to stick to safe money market funds and bank CDs.
Perhaps as a sign of the times, two new funds that Strong introduced recently -- Strong Technology 100 Fund and Strong Internet Fund -- have generated a lot of interest.
"People from all demographics are interested, for regular and retirement investing," Schneider said. 
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