Investment Clubs: Fairfax

Marketplace Staff Mar 2, 2007

TESS VIGELAND: Today we return to our series about investment clubs.
We’re following three of them — in Seattle, San Jose and Fairfax, Virginia — as they figure out what stocks to buy, sell and hold throughout the year.

A couple of weeks ago I left Los Angeles — where it was 85 degrees — for our investment club in Northern Virginia. When I arrived for the meeting early Saturday morning, it was 12 degrees.

INVESTMENT CLUB MEMBER: Morning! How are you?

VIGELAND: Good morning. Oh my goodness can I get over the snow? Nice to meet you . . .

I did. And nothing warms the soul of a frozen Southern Californian better than hot coffee and homemade cinnamon rolls. Courtesy of the morning’s hostess, Fran Betzner.

VIGELAND: Oh this just smells incredible. F

RAN BETZNER: Oh it didn’t turn out, the dough didn’t rise.

VIGELAND: Still smells great.

Bagels, coffee and spreadsheets in hand, 10 women situate themselves around a long oval table. And Fran calls the meeting to order.

BETZNER: I’d like to start with a prayer. Dear Lord. Thank you for this beautiful day. The sun is shining. We don’t know if we’re going to get more of the white stuff. But we know you are always with us. Keep us safe. And we thank you for all your blessings. Amen.

GROUP: Amen.

BETZNER: OK, we definitely have a quorum and any corrections to the January minutes? OK, we accept the minutes . . .

The club has 12 members. They call themselves “Formerly Baroque.” Almost all are wearing thick sweaters to ward off the chill outside. Some are retired from careers in nursing, teaching and marketing. A couple of them work in banking and accounting. One’s a puppeteer.

The club started some 13 years ago. Bobbi Manley’s been in it for the last nine.

MANLEY: A group of women decided that they didn’t know very much about finances. A lot of our women were single, either divorced or widowed. That’s how the club started so everybody could learn.

BETZNER: And if you look at the letter we give to newcomers it states our objectives are to learn and to make money.

INVESTMENT CLUB MEMBER: And that’s I think one of the last holdouts for women getting into finances, getting into investing. Which is not logical because women as a high percentage are the survivors. In most cases you’ll outlive your husband. And all of the sudden you don’t know how to do any of this. This is an area women really need to get savvy in.

And with the exception, maybe, of a couple of recent additions to the club who are still learning, they ARE savvy.

BETZNER: OK, Pat, financial reports — did everybody get their’s?

PT: We’ve had two good months. Our decision to buy as much as we did in January was a good one. We did really well.

VIGELAND: Did you buy a lot of different stocks or did you buy stocks that did really well?

PAT: We bought more of one and them I think three others that were brand new for us.

VIGELAND: And which ones were those?

PAT: Trimble Navigation, we bought more of HomeEx.

INVESTMENT CLUB MEMBER: And more Crocs.

PAT: And more Crocs. We love Crocs.

VIGELAND: Is that the plastic shoe?

PAT: Yeah, Barbara has them on.

Exactly how well did they do in January? In sum, the ladies of Formerly Baroque whupped the overall stock market with a return of 9 percent on their investments..
The S&P 500 gained a paltry 1.5 percent for the month. We’ll find out how they did it — and what’s behind the Crocs obsession — later in the show. This is Marketplace Money from American Public Media.

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Time to revisit our investment club in Northern Virginia. Once again, a reminder that these are amateurs investors and their opinions and advice are solely for the purpose of their own investments.

We head back to Fran Betzner’s house in the town of Haymarket, just a few miles from the civil war battlefield at Manassas. They’ve finished up with old business and are now on to a regular feature of the meeting that you might call Investing

BETZNER: All right Dee, you’re on for our learning presentation. You have something for us today?

DEE: Recently in talking to Jonelle when we talked about market order versus a limit order she said I don’t really understand what a limit order is. I thought I would just briefly discuss that . . .

At the time of our visit the club had $96,688 invested in the stock market. It’s hard to say exactly how well they’ve done in their 13 year of existence because members come and go. And when they go, they take their share of the profits with them.

The club is about to hit a milestone: $100,000 dollars invested in the market. At which point they’ll celebrate with champagne. But first they have to decide which of their nine current stocks to buy, sell or hold.

BETZNER: All right, now for the big time. Review of our positions. I have Crocs. And I’d like to start by saying I have helped our stock this month by buying six pairs of Crocs. I bought myself a pair I love them I should have had them on. I did their chart. It’s one of those that just needs to be watched it’s gonna go up and down and up and down. But it looks like it’s doing well I think that it’s something that we should consider buying more of.

As they go around the table each member discusses one of the stocks they’ve been following on behalf of the group. They’re invested in an Irish bank. They recently bought shares of Infosys — a technology firm in India that our Seattle club also has an interest in. And after following housing stocks here in the U.S., the women recently invested in a building company in Mexico called Homex.

But what they get most jazzed about are the products they can see and wear — like the Crocs. And another footwear item.

Club member Carol Ischinger follows it.

ISCHINGER: OK, I’ve got Heelys and they are the rolling shoe. And this is an IPO so it’s been up and down this month. I recommend that we hold. The news on this particular article says there’s been a little dent because of knockoffs in Asia. But still it’s a strong market, kids like it and it’s probably gonna experience some more ups and downs.

VIGELAND: And is this like the Crocs where you own a pair of these?

ISCHINGER: No, I don’t have the shoes with the rollers in them. (Laughs)

And sticking with the wearable theme, they track a company founded by a former college football player.

Club member Jonelle Usselman.

BETZNER: OK, Jonelle.

USSELMAN: Alrighty: Under Armour is doing very well until earnings came out. And then it dropped significantly. Even though it had earnings that were 69 percent over last year, but it missed its mark by one penny. They expect the revenue and income to improve during 2007 by 30-35 percent. And they also have started selling baseball and softball cleats which is honing in on Nike. Jim Cramer is hot to trot on Under Armour as he is on Crocs.

VIGELAND: You pay attention to him?

USSELMAN: I have a nice article by him. (Laughs)

CLUB MEMBER: That Under Armour I have purchased a lot of that for my sons and my grandson and my nephews and . . .

OTHER CLUB MEMBER: My son’s in the Army and came home a couple of weeks ago and he did a whole washer load full of the stuff.

USSELMAN: Most of the analysts are recommending a hold and I am, too . . .

And that continued a trend of hold recommendations throughout the meeting. In fact they didn’t want to sell a single stock.

USSELMAN: The fact that we’re happy with what we have, that’s unusual. That we aren’t selling something here.

VIGELAND: Well that means you’re very wise investors!

CLUB MEMBER: This month! (Laughs)

USSELMAN: A few months ago you would have said otherwise.

VIGELAND: What happened a few months ago?

USSELMAN: I don’t know, everything just seemed to go down all of the sudden. Everything that we had invested in just wasn’t doing well at all. And we pulled everything out and we were mostly in cash at that point.

The opposite is true now. Their club money is fully invested, and that means they don’t have any cash to buy new stocks or buy more shares of the stocks they already have. But club member Maureen Andersen warns that may be a sign.

ANDERSEN: You know everybody says well what’s the market gonna do? And I jokingly said but it’s not really jokingly that when I’m fully invested, which I am now, market’s about to go down. Truthfully, it worries me a little bit. We are all very high, we’re fully invested here, it’s been years since we’ve been fully invested. So not to be doom and gloom but we need to be cautious and realistic that it won’t go up forever.

That’s a lesson millions of investors learned just this past week. With that the ladies of Formerly Baroque adjourned and headed back into the snow.

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