Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.
TEXT OF STORY
Tess Vigeland: Back now to our investment club series. This year we’re visiting with a club in Minnesota as they figure out what stocks to buy, sell and hold throughout the year.
Vigeland: The members of the Crow River Investment Club in St. Michael, Minnesota, are a diverse bunch. There’s a landscape designer, a food scientist, an industrial waste consultant and one of them sells primitive Americana — musket rifles and the like — to collectors and movie studios — more on that later.
In all, Crow River boasts 15 members with four more on a waiting list.
On a recent snowy evening — make that snowy and -10 degrees — they crowded into club vice president Lynn Ostrem’s basement living room.
My first meeting with this club happened to be its annual meeting, so there wasn’t a lot of debate about stock picks. Most of the discussion revolved around goals for the year.
Club president Diane Windingland called the meeting to order:
Diane Windingland: Welcome to the annual meeting of our Crow River investment club. If you haven’t already handed your check in, you can hand it to Craig…
It costs $299 to join Crow River, plus $30 each month — pretty standard dues, based on the other clubs we’ve visited with.
After the group approved a new slate of club officers, outgoing treasurer Craig Block ran through a list of recent investments. Crow River has almost $17,000 in the market, with another $2,200 in cash.
Craig Block: We transferred in $1,000. I purchased five shares of Stryker totaling $360.50, nine shares of Infosys totaling $389. Dividends: Stryker, of $7.59, Lowes of $6.08 and PetSmart of $1.80, giving us an ending balance of $975.62.
So you heard some of their stock holdings there: PetSmart, Lowe’s and Stryker, which sells surgical equipment. The club is also invested in Walgreens, Wells Fargo and three other companies.
Now, one of the main requests we have of clubs we profile on the show is that we want to know everything: the stock-picking victories and the mistakes. Crow River was hesitant to share at first because, as Lynn Ostrem admitted, the club’s performance took a nasty turn at the end of last year.
Lynn Ostrem: We ended the year down 12.3 percent and that was mainly due to the fact that we were not in the three hottest sectors for last year and we took a tumble with our financials and all of our consumer discretionary that we chose not to sell and it kind of came back to bite us.
Vigeland: So, was that something where you really took a hit in the last six months?
Ostrem: We were running in the mid-to-upper 20 percent, 25, 27, 22 percent year-over-year and we were doing great until the last quarter of the year and it just tanked on us and we weren’t prepared for it and that was our fault, but we’re gonna fix that this year.
And the club’s come up with several ways to do that. It’s created a portfolio management team that will essentially pre-screen stocks for the group. The club also decided it might be time to revisit some of its investing rules, including the rule that it won’t buy any companies that have been public for less than five years — that’s meant that companies like Google were verboten — and there was a lot of emphasis on improving communication within the club.
Windingland said that should start with the meetings:
Windingland: I know one of the things I was looking forward having more people participate in the communication at the meeting. Now with 15 people, it’s not like everyone can talk a long time.
Ostrem: This is Lynn. Also, we have too many activities for everybody to be able to study every stock that we have, but if we can do it more in a group setting I think that might be, that might add to the discussion.
Kim Windingland: This is Kim. I think that is a very good idea and will help a lot. I believe this coming year we’ll see much more interaction, probably even closer to a level where Lynn’s at… maybe we’ll set that as a goal…
Yes, Lynn is the group’s leader in loquaciousness.
So the club’s got a few things to work on this year, but no matter what’s happening with its investments, nobody’s gonna miss the big club social event in June, hosted by member Carole Ripplinger.
Carole Ripplinger: Probably the time we’ll have people arrive about one o’clock, they’ll get a safety lecture and familiarize themselves with some of the weapons we’re gonna shoot and we’ll go out to the range at two…
Vigeland: OK, I’m gonna stop you guys… what is a barrel shoot?
Ostrem: Ok this is Lynn. Carole and her husband have a business where they are involved in muzzle-loading, antique weaponry. We had what’s called a black powder keg party, so we go out to the local gun range and we shoot these muzzle-loading black powder guns and we had a great time so we’re doing it again this year.
Until then, they’ll only be taking aim at the stock market. We’ll check in later in the year to see if they’re on target.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.