RSF man’s career includes rock n’ roll and high finance
Wednesday, July 16th, 2008This article was originally printed in the Rancho Santa Fe Review on June 26, 2008, and was not authored by American Money Management, LLC or any of its representatives. Please read important
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SD Ranch Coast News
RSF man’s career includes rock n’ roll and high finance
Long-time Rancho Santa Fe financial adviser Gabriel Wisdom didn’t expect his firm’s 18-month-old Fallen Angels Income Fund to be ranked No. 1 in its category by Lipper, a well-known mutual fund ratings service.
But earlier this month, that’s exactly what happened – even though the fund hasn’t been around very long, and its assets are modest in comparison to funds offered by such industry heavyweights as Fidelity, Vanguard and T. Rowe Price. Lipper ranked the Fallen Angels fund as tops among 537 similar funds in its category for year-to-date returns for 2008.
“It surprised us,” said Wisdom, 58, who is well-known in San Diego as a finance expert and a radio and television personality, including his early work as a “hippie DJ” at San Diego and Los Angeles rock radio stations.
Wisdom is managing director of American Money Management, which specializes in managing custom portfolios for its clients. It recently launched two publicly traded mutual funds, the Fallen Angels Income Fund and the Fallen Angels Value Fund, which take advantage of investment strategies developed by Wisdom and his partner, Michael Moore, to maximize their clients’ investments.
According to Wisdom, “fallen angels” is an old Wall Street term used to describe companies whose fortunes have declined, but are expected to rise again.
Rather than pulling back from a market because of falling stock prices, Wisdom and Moore think that’s the best time to shop.
“Our style is to remain in cash until bargains show up. This is a good market for us, we like it like this,” said Wisdom. Moore spends his days “combing the bloodied landscape,’ looking for something that’s fallen into excessive lows, well below its intrinsic value, said Wisdom.
Wisdom believes Wall Street operates in a way that runs counter to common sense, pointing out that when goods go on sale in a department store, shoppers flock to pick up bargains.
“Whenever anything goes on sale on Wall Street, buyers stay away, they withdraw,” said Wisdom. On the flip side, he said, buying “tends to hit its peak, in terms of participation, after prices have already risen for a significant period of time.”
The Fallen Angels Income Fund is a “mixed-asset” fund that seeks to provide income or dividends to investors, said Wisdom. The fund has no load or sales charge, and the minimum investment is $10,000. Currently, said Wisdom, the fund has assets of about $40 million.
The fund’s year-to-date return as of June 20 was 2.03 percent, according to the Morningstar rating service. According to Wisdom, the Fallen Angels Income Fund has done better than many other similar funds, which have suffered losses in this year’s volatile market. He said some sectors of the market are down 20 to 50 percent.
Wisdom has worked in the financial field in San Diego for 25 years. Before starting his own company nine years ago, he worked for investment houses such as Shearson Lehman Brothers, Prudential-Bache and Sutro and Co.
He has also provided commentary on financial issues for local television and radio stations, as well as “Marketplace,” a nationally syndicated financial affairs program that runs on public radio stations. “The Gabe Wisdom Show,” which features interviews with the authors of books on the stock market and investing, airs on AM 1000 at 4 p.m. each Monday and Friday.
Wisdom got his start in radio in the 1960s, when he worked as a disc jockey at such pioneering San Diego rock stations as KPRI and KGB.
“The Beatles were still together when I started in radio,” he said.
He served as the inspiration for a character in Cameron Crowe’s film about the rock scene in the early 1970s, called “Almost Famous,” which was filmed in San Diego.
His transformation from DJ to financial adviser began with a series of real estate investments in the 1970s, which turned sour with a market downturn in the 1980s.
“I wound up giving away my properties so I didn’t have to carry them,” he said. “It was a real hard lesson in economic and business cycles.”
The father of three daughters, Wisdom and his wife, Diana, a clinical psychologist, live in Rancho Santa Fe.