Politely Stay the Investment Course

I knew that the temper of our investment club had mimicked the graphed curve that reflects the ups and downs of the stock market when the e-mail a few weeks ago, previously used to publish the minutes of the last meeting, directions to the hostess’ home or tips on new industries, complained about personality difficulties and that members were leaving the meeting without taking their coffee cups back to the hostess’ kitchen.

We started our club, the Intrepid Investors, in 1986. Our goals were to increase our knowledge of the stock market and learn how to invest money. The membership, now numbering 16, has renewed itself a few times, and we’ve made some good decisions, but it’s the lows that have taught us the most about how to handle the market and each other.

We have made mistakes, big ones. In 1986, one member suggested we buy stock in Amgen, the new biotech company in Thousand Oaks, but who wanted to invest in a simple hometown company? Too much risk involved. Instead, we bought Liz Claiborne, a stock with merchandise we liked that was flooding the department stores. Still is. We had read in Better Investing about investment club members who had invested in Liz, sold just part of it and were cruising to Europe together. We saw ourselves sailing on the Love Boat just as the 1987 crash shipwrecked our hopes. We bought high and sold low in a panic, one of the cardinal sins of investing. By my reckoning and with a little help from the Amgen Web site, an investment of $1,000 in Amgen in March 1986 would be worth about $178,000 today.

We have attempted to personalize relationships by occasionally having dinner meetings. We invited husbands or significant others but quickly decided that inviting men with absolutely nothing in common but their wives’ investments and stuffed chicken breasts was not the way to have either a social or a productive evening. Our dinner meetings are now members-only.

We have invited speakers in the hopes that they will educate us. A few of us were impressed by a female stockbroker and invested with her only to find that she was not impressed with amounts of money under $50,000. Nor it seems are most stockbrokers who would rather deal with the large sums necessary to generate large commissions.

We learned that sometimes we need to see past the lesson and assess the broader motives of our teachers. The sad truth is that in the last year, our portfolio, well-invested in the technology companies that we and others rushed to buy, has declined about 50%--from a high of $80,000 to about $40,000.

Not only has our portfolio declined, but personalities and procedures have made the members as disgruntled as investors who have held onto their Yahoo stock. But we continue to meet, aware of that graph of the stock market that promises that buying and holding, even through the bear markets, will ultimately bring fortune through the years.

At our last meeting, we put our differences aside and, our optimism rebounding, decided to buy stock in a biotech company that is developing an Alzheimer’s vaccine. We made some other changes too. We will concentrate on two or three promising stock studies instead of looking at the six to eight that enthusiastic members can generate. A timekeeper will limit discussions, and we’ll follow parliamentary procedure more carefully. I left the meeting with the hopes that the fortunes of the stock market and the club would rise again. We vowed that as a club, we would not let our disappointments in the market discourage us; we would be mature and respectful of one another.

I felt hopeful as I said a polite good night, then picked up my cup and saucer and carried them to the kitchen.