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Tess Vigeland: With all the market madness this week, we decided to check in with a couple of the investment clubs we visited last year and see how they’re weathering the Wall Street storms.
The ladies of Formerly Baroque in Virginia had their first meeting of 2008 last weekend.
I spoke with club members Pat Meadows and Jonelle Usselman and asked how much concern there was at that meeting about the market’s performance so far this year. Here’s Pat:
Pat Meadows: I believe that there were a lot concerned, I know especially on my part. I am a charter member of the club, which means I go way back and have been through a lot of dips and went through 2000-2002. It was right after 9/11 and the market was going down and people were seemingly panicking, so we didn’t want to project that. All the indications were, the analysts and people like that were saying “Be patient; in the long run, things will be fine,” but we lost half the value of our club. It took us a long time to get that back. So, I was like Chicken Little on Saturday, you know “the sky is falling, the sky is falling” — I think we should pay attention.
Vigeland: Alright, how about you Jonelle?
Jonelle Usselman: I guess because I didn’t experience that back in 2000, 2001, I took a little different approach and that was to ride out at least some of the stocks. Now, nobody wanted to hold everything, but I think some people felt that it was important to hold on to ones that were more defensive-type stocks, although, you know, in the long run, they may not have been.
Vigeland: Is there any discussion within in the group of this as a buying opportunity?
Meadows: Not yet.
Usselman: I think some of us feel that it is and I look at it as a judicial buying opportunity. I think that we need to do the due dilligience even more greatly at this point.
Vigeland: So what goes through your head when you watch something like what happens on Monday, where the whole world tanks, on Wednesday, the Dow falls 300 and by the end of the day it’s up 300. How do you deal with that as an investor? Pat?
Meadows: Well, it’s very difficult, I think. The market’s in a correction. For us, it’s not our income — I mean, it’s not what we’re living on — and again, there’s safety in numbers and the other members of the club… you know, cooler heads prevail and they are very wise ladies, but you have to be careful who you pay attention to.
Vigeland: Jonelle, you’ve talked about kind of wanting to hang on. Is it hard not to just yank everything out of the market right now?
Usselman: Yes, it is, it’s very hard, but I don’t — even personally, with my own stuff — feel that I can sell just because things are going down.
Vigeland: Well, Pat and Jonelle, thanks for sharing your wisdom once again with our audience.
Meadows: We appreciate you checking back in with us.
Pat Meadows and Jonelle Usselman of Formerly Baroque speaking to us from Virginia earlier this week.
On Wednesday I called up the San Jose club during their monthly meeting and talked to Kathy Tegtmeier and Marvin Kohn. I got Kathy’s take first:
Kathy Tegtmeier: This is a pretty scary market. Do we buy and hope that the bottom is nearby and that the stocks are going to go up or do we sell, which I had to do because, after all, we’re supposed to buy low and sell high, or do we just hang on and wait?
Vigeland: What do you think?
Tegtmeier: I hesitate to sell. I am a really slow seller. I feel like I’ve got good companies and they should weather a bad market, but even places like Walgreens, which we own, the sales are slow. If people are not going to be spending money, than anything in retail I worry about. I’m afraid that we’re going to see a lot of companies with earnings down and that’s when we don’t buy.
Vigeland: OK. And I’d love to talk to Marvin if he’s there.
Tegtmeier: OK, I’ll go get him. Hang on.
Marvin Kohn: Hi Tess.
Vigeland: Hi Marvin. How’re you doing?
Kohn: Personally fine.
Vigeland: Alright, well, tell me what you’re thinking about the markets these days. What does your gut tell you?
Kohn: Well, my first thought was, when I sat down to visit with these friends of mine here, we’re in a position right now of saying “what is nice and cheap?” The only question is, “is it going to go down further or is it going to level out — when is it going to start back up?” Now, my personal view is I like to consider buying just after it starts back up and you will never know when that is until you’ve gone past it a little bit.
Vigeland: And what about as a club? What will you be talking about today and urging your fellow members to do?
Kohn: We’re going to be looking at the possibliity of buying stocks that we passed by in the past because they were overpriced. We may not buy; we may end up going to Hawaii as a group. Who knows? We happen to have a fair amount of cash.
Vigeland: Alright, well, it sounds good to me. Maybe I’ll join you.
Vigeland: Thanks so much Marvin.
Kohn: Sure, anytime.
That’s Marvin Kohn and Kathy Tegtmeier talking to us on Wednesday from their investment club meeting in San Jose, California.