Investment Club Kudos

Today was our investment club meeting and we went over our results for 2009, which overall we were pleased with. The accounting program we use has some new "toys" available, including various charts that can be printed out, and so during lunch on Friday I took a look and was surprised with our overall results. Not that we're anywhere near that 14.9% a year compounded annual rate of return that we need to make for five years in a row in order to double our money. Nope. However, when compared to two important indexes, we haven't done so badly at all. Our club's results were weighed against the results of a bundle of stocks that mirror the holdings of the S&P 500 and the Wilshire 5000 Index. For the period 5/11/05 (the date we made our first purchase) to 1/15/10: Club total return: 9.52% Wilshire 5000 Index total return: 0.18% S&P 500 Index total return: -0.53% Compound annual return for period ending December 31: 1 Year (these results are skewed because of the great crash that occurred in the market 10/08 that bottomed out in 03/09; we had a nice rebound :)) Club: 53.01% Wilshire: 28.08% S&P 500: 25.71% 3 Year Club: 7.96% Wilshire: -3.58% S&P 500: -4.32% We are pleased with our job as stock pickers over the past 4.5 years, but think we can do better. The Great Recession has taught us that no matter how carefully we screen our companies, shit happens. We are now on the hunt for a couple of new investments, looking to diversify and move into totally new areas.

Shopping, Shopping, SHOPPING!

Hola! I've passed 1,900 posts, yippee yay! Today was our investment club meeting and gift exchange. We has a lovely breakfast - the restaurant was busier than we've seen it the past three months - and we had to wait nearly 30 minutes for a table for five. Wow! It was worth the wait, though, because the food is always good at Meyer's. Our portfolio is in sad condition, we only have two stocks in the black, but we're looking to make another buy next month. Get 'em while they're on sale. We're not panicking and we're not selling. Every company/ETF we own is solid and will turn around when the economy turns around. People need water - people need oil, and machines, and food, and medicine. That's what we're invested in. In a holiday mood, and with sales at the shops presenting some irresistible bargains, I visited the Mall after our meeting ended and spent a few pleasant hours shopping for incredibly discounted Christmas ornaments - I bought more than I planned and when I got home I spent another pleasant few hours rearranging my Christmas tree to find spots just so for the new purchases! Also found some incredible bargains in clothes and bought a new outfit for Las Vegas, and a few little gifts for Isis and Michelle :) The weather - oy! It was WARM today (in the 40's) and the rain didn't come, and didn't come, and didn't come... I thought perhaps we might be lucky and not get any rain at all, sparing us black ice and ice-rink style sidewalks tomorrow for the commute to work. Alas, it was not to be. When I poked my nose out the patio door to throw out some cut up raw carrots for the possum shortly after 6 PM it was raining. The rain was blowing at a 45 degree slant, the wind is still gusting up to 40 MPH from the south but that will change later on as the temperatures plunge. Sigh. I sure hope our trees and wires and electric towers don't get coated with ice like what happened out east a few days ago. Yikes! I bought more Brazil nuts and hazel nuts and peanuts for my fat, sassy squirrels. They were out on the deck entertaining the ladies of the investment club earlier today. The blue jays visited too, dive-bombing for peanuts, and everyone oohed and aahed over the pair of cardinals who dropped by. I've the best fed menagerie in town.

Sunday Miscellany!

Hola darlings! I'm tapping away on the Toshiba laptop outdoors at the moment, with the Packers/Seahawks game on the radio in the background. It's a gorgeous day, one of summer's last gasps. Hot, humid, sunny, a fitful breeze. It's after 5 now and the squirrels are out in force, foraging for peanuts and other treats, and the sun is sinking in the southwest. I should have cut the grass in the backyard today, but I didn't. It was too damn hot and humid! I think it reached 80 degrees, incongruous when looking at the trees colored and shedding their leaves, my hostas and grape-vine covered fence turning yellow. At the moment the Packers/Seahawks are tied 10-10, but the Seahawks have the ball at the moment... Today was the ladies' investment club meeting. One of our members left at the end of June, but our newest member joined at about the same time, so we are still at five members. Despite - oh yippee! Packers just scored, and now lead 17/10 - Despite losing most of our gains accrued during the past three plus years in the past seven days' market crash, we have accumulated some cash and are buying great companies at Depression-era prices. It's just amazing to me that we have already purchased stock in two companies whose shares are selling for less than solid book value. People are so fricking stupid some times, selling their stocks at the worst possible moment! But hell, we're just a small group of middle-aged LIBERAL Democrats, what do we know from Wall Street, heh? We're all old enough to have lived through several recessions before, and it doesn't make any difference to us that this one is caused by a "liquidity" problem. Eventually it will be solved, one way or another, and things will either go on as before or we'll all be living in caves and it won't make any difference. Darlings, despite the Republicans' best efforts to force us back to the Stone Age in the USA, I do not believe we will be living in the Stone Age. So, here I sit, gingerly typing away on this yet unfamiliar keyboard as the squirrels cavort around - much to the ladies' delight earlier today a couple came up to the open patio screen door and peered in, seeming to intently listen as we discussed the current market conditions and our potential purchases! So, here I sit, not writing about anything of substance, just knowing that despite the market's gyrations, the world, and life, go on, oblivious of Wall Street and all of our collective Angst. This too, shall pass. The leaves are turning, and are dropping from the trees; the sun is going down before 6:30 now, and now rising until after 7 a.m.; the squirrels have fat white bellies, well, at least the squirrels who hang around here have fat white bellies! Today is beautiful, and I'm enjoying it. I've got a hot pizza waiting in the oven, a full glass of wine, and the Packers are winning against that TRAITOR MIKE HOLMGREN. All is right with the world.

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.