Friday, October 5, 2007
Friday Night Miscellany
I'm tired tonight darlings, so this will be relatively short. Judit Polgar is one of the announced super-GMs who will be appearing in a stellar "A" Group line-up at the 2008 Corus in January. Corus, as you may (or may not) know, was bought out by the Indian Tata conglomerate. I'm glad to see the management is continuing the Corus Super-Tournament tradition. As far as I can tell from scanning news reports, Judit hasn't played in a tournament since she lost in the beginning rounds of the play-offs for spots in the World Chess Championship "Tournament" recently concluded in Mexico City. It will be good to see her in action again, and let's hope she's been doing some serious studying. It's a pain in the you-know-what to constantly keep to the grind of staying on top of the latest games and chess knowledge, but if you want to stay in the top, that's what you have to do. It's the same in many professions. Whew! Sure glad I'm not a top level chess player! Speaking of Tata brings to mind what I've been up to my ears in the past week - doing research for the investment club of which I'm President and chief, cook and bottlewasher. It's a grind when I'm doing research into potential "buys." Not only do I have to convince myself (not such an easy job), I have to also convince the members of the club that a particular company is a worthy "buy" candidate! I first heard about "investment clubs" in December, 2000 - yes, right around the time of the beginning of the tech stock crash (it took several months, if you'll recall). It was at the old "Officeworld" as I used to call it (where I work now, I just call it the office, because it's not near the soap-opera as was my former place of employment, my my my). I attended the January, 2001 club meeting at Officeworld and I was hooked. By March, 2001, I had opened up a brokerage account (my "play" account) and was regularly investing a fixed amount each month in addition to the amount I was contributing as a member of the Officeworld investment club. Theretofore, I was like millions of other Americans, convinced that investing and money management and such was something best left to the "experts" for which you paid fees every year. How wrong I was. I had "beginner's luck" - really - in my initial "on my own" investments. But - it also was not as easy as I thought at first. Shortly after I joined the Officeworld investment club, I took a good hard look at my 401(k) investments. Like millions of other Americans, I am not covered by a pension plan - there is only the 401(k) plan and - as I was lucky to have - a profit-sharing plan. From what I'd learned as an investment club member, I was able to insightfully analyze the investment returns of the various funds offered for investment through the 401(k) and profit-sharing plans, and made some adjustments - to my benefit. Before then, I'd been coasting along, just like millions of others do, "chasing" after prior returns instead of really grasping the essentials of fund returns. (Hint: It's not so hard to understand, when you know what to look for and what to look at). As I educated myself by extensive online reading as well as mass consumption of commercial investment magazines, I developed a real "feel" for picking stocks. I'm not a trader by any means. I invest for the long term - five years or more. And so, my criteria, and the criteria that I have since taught to several other fledgling investors, is different (a lot different) from the short-term or day-trader approach. Since that first paying of club dues in January, 2001, I've come a long way. I have invested every month in my club and individual account (I call it my "play" account) since 2001, even through the fear-inspiring drop in the market after 9/11. I've learned that, for the most part, commercial investment magazines aren't worth the paper they are written on. I learned how to spot winners and trends long before they're published in magazine articles, when the lemmings jump (positive or negative) and may make a price shift one way or the other - a temporary price shit. I have also learned the art of waiting - for a stock price to come down into my "buy" range, and for a stock price to go up after temporary market set-backs driven by the "lemmings" mentality. This is one of the most important things I have taught to my "pupils" - besides buying growing companies at a reasonable price. I have had good success - and some disasters along the way - but not so many disasters because I've been careful. I've also been overly cautious at times and sold out of positions where I've had a more than 100% gain, only to see the price continue upward to 200% and more. Oh well... Anyway, after I left Officeworld at the end of September, 2002, I continued with the investment club there for awhile, but eventually there was a parting of the ways. To make a long story short, it has been my pleasure to be the President of a very small investment club for the past couple of years, and we have had great success. Our returns to date are - bragging now - over 72% since May, 2005, when we made our initial investment. Our goal is to double our money every 5 years; looks like we're on-track to do that well before our five year "first investment date." Of course, as we continue to add to our portfolio, it will become harder to achieve the success we've had to date - although we'll certainly try! I couldn't be more pleased with how things have turned out. I continue to learn and learn more about investments and investing, and I'm pleased to be passing along to others what I've learned - and we all learn together. Yes, I know, that sounds sentimental and blah-blah. We're having fun while we're doing the blah-blah. We meet once a month, usually for breakfast on a Saturday or Sunday, for a couple of hours. Right from the beginning, we've had outings just for fun. For instance, we've held a meeting on the train to Chicago for a day-trip; we've met for breakfast at different locations and gone over reports over eggs and coffee and then spent hours attending fairs and festivals and shopping. In November we're doing a "spa" day. The goal is to get some of the young hairdressers and spa attendants interested in investing as we chat about our current buy prospects and the status of our portfolio :) Suffice to say - I was always one to say "pay someone else to do it." Now I know better. I can do it better myself and save money to boot by doing it myself. You can too.