Here's An Interesting Stock Strategy

Bryan and Bob Auer | Auer Growth Fund

Bryan, 73, had been managing his own investments quite successfully for a long time when his son Bob, 48, took a job as a broker at Dean Witter Reynolds in 1986. Bryan opened accounts with his son but wasn't interested in the firm's research or recommendations. Rather, he had his own stock-picking system -- one the duo continues to employ at Auer Growth fund to this day: Cull through thousands of stocks looking for 25% earnings growth, at least 20% sales growth and a forward price/earnings multiple of less than 12. "Once a stock stops having those characteristics or doubles in price, we sell," Bryan says. "We started that process in 1987 and by 2007 our accounts had an annualized return of more than 30%," says Bob. So in late 2007 they launched Auer Growth, with Bob acting as portfolio manager and Bryan in charge of portfolio analysis. Naturally 2008 was an inauspicious time to start a fund, but for the year to date it's up 22%. When asked what's the greatest lesson he's learned from his dad, Bob laughs. "Only how to compound money at 30% a year." Wall Street Journal

Bob Auer was interviewed on CNBC today and made some sense on the bullish side. The article, called "Five Father-Son Teams Share Investing Secrets" by Dan Burrows,isappropriate to read anytime and now, just before Father's Day.

Their criteria :

1. EPS Growth This Year Over 25%,

2. Sales Growth Qtr over Qtr Over 20%,

3. P/E Under 10.