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How’s the Market, Fred Fern?

Fred Fern

Ethan Kaminsky

Fred Fern brings luxury retail — such as Gucci, Bottega Veneta, Burberry, and Ralph Lauren — to El Paseo. His real estate company, Chartwell Properties Inc., owns The Shops on El Paseo, occupying two blocks on the shopping boulevard’s west end.

The financial industry touts Fern as one of the country’s top investment advisers. Barron’s ranked him fifth on its Top 100 Independent Advisors list for 2011. Fern, who founded Los Angeles-based Churchill Management Group in 1963, has survived six bear and bull markets.

His strategy is based on stock market data dating back to the 1920s. Churchill’s Los Angeles and Palm Desert offices have rooms with walls papered with charts showing market movement.

How did you handle the last large market drop?
We have managed money for the last 11 bull and bear markets. We know when it’s time to get out at that high-risk point. We go in and out in steps. We took 25 percent of our clients’ money off the table in June and were 100 percent out by the time it all came apart.  

How do you know when it’s the right time to start buying again?
We are now waiting to see what we know as the low-risk point to start taking steps to get back in. We let the market tell us where the bottom is by using the chart room, technical and fundamental factors, and sentiment analysis. We have a clear definition that helps us define high risk and low risk.

How does this bear market differ from past ones you’ve experienced?
It is history repeating itself. But people need to recognize the true facts of volatility. In 1929, the market dropped 400 points and people said, “The world is coming to an end.” That was 90 percent of the market’s total value. When the market drops 400 points in a day today, people have to look at the total percentage it dropped and put that into perspective. People aren’t considering that today because of modern communication between the Internet and cell phones and watching CNBC.   

What is the perfect desert weekend for you?
My wife and I are going to celebrate our 50th anniversary, so spending time with her here because we love it so much makes a weekend perfect. I play golf. We love eating at the Ironwood clubhouse dining room and use it as our kitchen. We go to McCallum Theatre and enjoy some shows at the casinos. We recently saw Train and enjoyed Jay Leno last year. We are building a new home at Ironwood and probably will become more full-time residents, except for the summers.