Former Magellan Manager Vinik Again Embraces Micron

Fund manager Jeff Vinik’s biggest investment at the end of the first quarter had a familiar ring to it - Micron Technology Inc.

Vinik, the former manager of Fidelity Investments’ flagship Magellan Fund, is a defendant in a class-action lawsuit that alleges Vinik was touting Micron shares in late 1995 at the same time his fund was selling the stock.

Vinik left Boston-based Fidelity almost a year ago to open his own investment firm to manage a hedge fund for institutional investors and wealthy individuals.

His fund’s No. 1 holding was Micron, the Boise-based computer chip maker, according to Technimetrics Inc., a New York-based research group.

Vinik’s group held almost 1.4 million shares of Micron, worth about $55 million at the end of March.

Micron shares traded at an average price of $35.55 each during the first quarter.

The stock closed Friday at $38.25.

It’s likely Vinik’s position in Micron has changed since March 31, given his penchant for actively trading stocks, said Cary Krosinsky, a vice president at Technimetrics.

“Still, it’s interesting that Vinik would be buying a stock that’s caused him so much trouble in the past,” Krosinsky said.

Tax law favors health insurance

To encourage self-employed individuals to obtain health insurance and to treat such taxpayers more fairly - compared to corporate employees who are covered by an employer-sponsored health plan - the tax law includes an “above-the-line” deduction for 25 percent of the cost of health-insurance coverage for self-employed individuals.

For example: Suppose Belinda Katz, a self-employed (unincorporated) pharmacist, pays $4,000 per year in premiums for health insurance.

The tax law allows Katz to claim $1,000 (25 percent of $4,000) as a deduction from gross income. The remaining $3,000 of health insurance premiums may only be claimed as a medical expense deduction.

Unfortunately, since medical expenses are deductible only to the extent that they exceed 7.5 percent of adjusted gross income, it is likely that Katz will not be allowed to deduct the $3,000 of premiums that are designated as medical expenses.

New funds to consider

Check out these brand-new mutual funds that seek good values in an expensive stock market:

Pasadena Value 25 (1-800-882-2855), which invests in about 25 high-dividend stocks in the Standard & Poor’s 500-stock index. “You might call these the Dogs of the S&P,” says its veteran manager, Roger Engemann. He’s applying the popular system of buying the 10 top-yielding Dow stocks to the S&P.

Third Avenue Small-Cap Value (1-800-443-1021), co-managed by the brilliant Marty Whitman and a young protege, Curtis Jensen. Whitman’s Third Avenue Value, for larger stocks, has returned an annual average of 22 percent since 1990.