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Eight money managers examine portfolio management strategies in the latest Issue of The Wall Street Transcript available at (212/952-7433) or http://www.twst.com/info/info592.htm

TWST: Can we start out with a quick overview of Cabot Money Management, how it started, and what the framework is?

Mr. Marini: The company was founded in 1983 by the current President, Rob Lutts. Back then, we were a one-portfolio shop — basically a small cap growth account. Over the last 19 years, we’ve really evolved to the point where we consider ourselves to be a total wealth management firm, not just a money management firm. In addition to the money management side of the business, where we have the ability to customize portfolios to fit a client’s specific needs, we now also offer complete financial planning services, including estate planning, insurance planning, tax preparation, you name it. While the name is still Cabot Money Management, we’re actually thinking of changing that in the next year or so to better reflect what we’re doing now. We manage about 350 million in assets for mostly high net worth individuals, and like I said, we have evolved quite a bit, especially over the past two to three years, by making a major commitment in terms of being capable of offering our clients more than just money management services.

TWST: What else would you like to highlight besides Moody’s?

Mr. Marini: Another big holding we have, our second or third biggest weighting in our aggressive accounts, is a company called Expeditors (Nasdaq:EXPD). They’re a leader in the transportation and logistical services sector. We’re always looking for what we call a “best of breed” company, meaning a firm that is far and away the best run outfit in its industry, and within the logistical services transportation sector, Expeditors is it. The reason they are number one is their unique model. They own no assets — no planes, no trucks, no ships. It sounds odd, doesn’t it? How can you be in transportation and not own any of the underlying assets? But because they don’t own any of those very costly assets, their model requires very little capital investment and therefore generates a ton of free cash flow. The reason they are able to pull if off is due to their very experienced management team. I think the combined management team has been in this business something like 200 years. The bottom line is this firm buys cargo space from others and they then work out the cheapest shipping routes available. They then resell this cargo space to their customers. These customers don’t want to be arranging the shipping logistics themselves because it’s very complicated. For example, we’re talking about shipping goods from Cleveland to China, and there’s obviously a lot that goes into it. The trend in the industry is to have one company handle all the customer’s shipping needs, and that’s where Expeditors comes in. They handle all the potential problems from A to Z; and of course they work out the cheapest route. So they’re a middleman, with very low capital requirements, and higher margins than everyone else in the business. Now this asset-free model is not without risk. When you don’t have that capital-intensive model, then your barriers to entry are not as high as they might be. It is not as hard for someone to come in and try to copy your model. But because Expeditors is just far and away the best company in terms of service, we think that more than makes up for the weakness in terms of the lack of significant barriers to entry. They have no debt. They’ve been growing for the past decade at 25%-30%. They’re just a very solid company with an interesting management team. They actually seem to have an open disdain for Wall Street.

1) Juliet S. Ellis, a Managing Director & a Senior Portfolio Manager at JPMorgan Fleming Asset Management, examines portfolio management strategies in this timely and deeply informative 4,400-word interview from The Wall Street Transcript.

2) Mark N. Odegard, a Partner, Research & Portfolio Manager with Skyline Asset Management, examines portfolio management strategies in this timely and deeply informative 4,100-word interview from The Wall Street Transcript.

3) H. Giles Knight, a Managing Director at Allied Investment Advisors, examines portfolio management strategies in this timely and deeply informative 3,000-word interview from The Wall Street Transcript.

4) Robert S. Venable, Chief Investment Officer for First American Capital Management, examines portfolio management strategies in this timely and deeply informative 4,400-word interview from The Wall Street Transcript.

5) David K. Willardson, a Portfolio Manager & Lead Analyst at First American Capital Management, examines portfolio management strategies in this timely and deeply informative 4,400-word interview from The Wall Street Transcript.

6) Jack P. Phelan, the President of Helios International Asset Management Inc., examines portfolio management strategies in this timely and deeply informative 3,300-word interview from The Wall Street Transcript.

7) Jospeh Marini, a Portfolio Manager for Cabot Money Management, examines portfolio management strategies in this timely and deeply informative 6,200-word interview from The Wall Street Transcript.

8) James E. Manley, founder of Atlantic-Pacific Capital, Inc., examines portfolio management strategies in this timely and deeply informative 2,500-word interview from The Wall Street Transcript.