After earning his M.B.A. from the University of Wisconsin in 1987, Sekelsky moved to the Boston area to join Wellington Management Co. as an entry-level analyst working in the fixed-income and equity areas. A few years later, the Wisconsin native decided he was ready to be a bigger fish in a smaller pond.

That pond came in the form of Wisconsin-based Madison Investment Advisors. Founded in 1978 by Frank Burgess, Madison managed some $300 million in assets when Sekelsky joined the firm in early 1990. Burgess, who had run Mosaic Investors Fund since 1978, was the only full-time investment professional and one of nine employees.

Today, Madison Investment Advisors has 50 employees, a satellite office in Scottsdale, Ariz., and nearly $8 billion under management. Its fund group includes four stock funds and nine bond and money market funds. Sekelsky became Madison's lead equity manager, as well as the fund's lead portfolio manager, in 1995. He also serves as co-manager of the Mosaic Mid-Cap Fund, the Mosaic Balanced Fund and the Atlas Strategic Growth Fund.

Despite its parent firm's growth, the flagship Mosaic Investors Fund remains a relatively unknown offering that had just $35 million in assets a little over a year ago. Its biggest growth spurt came in August 2002, when Madison Investment Advisors acquired the $65 million LaCrosse Large Cap Fund from a trust company in Wisconsin.

The marriage has produced a concentrated portfolio of about 30 stocks, with between 30% and 35% of assets in the top ten holdings. Aside from having attractive valuations, companies that find a place in this concentrated fund must have a sustainable competitive advantage, a history of consistent, above-average earnings growth, predictable and growing cash flow, and stable to improving margins. Although he believes an equity stake is important to motivate management, Sekelsky also pays attention to the impact of stock options on corporate balance sheets. According to the firm's calculations, the average earnings-per-share dilution from stock option expense among companies in the portfolio has been roughly half that of the S&P 500.

Sekelsky cites Costco Wholesale Corp., which he purchased late last year, as a well-run company with an attractively priced stock. The largest of the three national warehouse club retailers, Costco's CEO and chairman are also its founders. Its sales growth exceeds that of its competitors, and the company successfully controls costs with its low-overhead stores, selective merchandise assortment and the purchasing power of the largest club retailer.

On the valuation side, Costco stock sold for roughly 18 times estimated 2003 earnings when Sekelsky purchased it, its lowest multiple since 1997. Madison Investment Advisors analyst Haruki Toyama projects annual earnings growth in the 12% to 14% range, with much of that growth aided by sales of recession-resistant food and staple products.

Sekelsky is less enamored with Bristol-Myers Squibb, a long-time holding he sold in March. His expectations that management would transform the company from a conglomerate into a pure pharmaceutical play failed to materialize, while its drug product pipeline turned out to be unexciting. The final blow came when the company ran into accounting troubles, causing Sekelsky to lose confidence in management.

In June, management issues also arose with Freddie Mac, another longtime fund holding, when the stock suffered a setback after the departure of several top corporate officers. Sekelsky says the controversy stems from the mortgage entity's inadvertent failure to apply general accepted accounting principals to certain securities transactions, and points out that the mistake actually understated earnings.

He continues to have faith in the stock and the overall health of the mortgage-backed securities market, although uncertainty about the outcome of the earnings restatement process restrained him from adding to the fund's position during the downturn. "The controversy appears to be a matter of misjudgment rather than fraud, and a lot of this is short-term noise," he says. "But Freddie Mac's risk profile has gone up."