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Welcome, and pull up a chair
In January 1994, a dozen of us sat in on a talk about money at our church women's retreat, and on the drive
home somebody said, "Why don't we just do it ourselves?" So we did. We read everything we could get our
hands on, joined the National Association of Investors Corporation, wrote up a partnership agreement at
Evelyn's kitchen table, and bought our first stock that May, 20 shares, with most of the money we had.
We were so nervous we called the broker back twice to make sure it went through.
We are fifteen women now, ages 31 to 74: three teachers, a nurse, a hairdresser, a pharmacist, two retired
ladies from the phone company, a minister's wife, a CPA who keeps the rest of us honest, and a few others I'll
let introduce themselves. I'm Nadine Faircloth, the club's recording secretary. I taught high school math
for twenty-eight years, which is why they made me secretary, and why they make me check the treasurer's
arithmetic.
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How We Invest
We follow NAIC's four principles, and we try hard not to get clever:
- Invest regularly, every month, whatever the market is doing. Each of us puts in $30.
- Reinvest the dividends and any gains, so the money keeps working.
- Buy growth companies: businesses whose sales and earnings are growing faster than the economy.
- Diversify across different industries and company sizes.
Before we buy anything, one of us has to fill out a Stock Selection Guide on it and present it at a meeting.
The SSG is a two-page form that makes you look at ten years of sales and earnings, whether management is
keeping its profit margins up, and what a sensible price would be. We look for a stock we think could double
in five years, and where the possible gain is at least three times the possible loss. If it doesn't pass, we
don't buy it, no matter how much somebody's brother-in-law likes it.
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Our Portfolio at a Glance
Eleven companies as of our September 14 meeting, listed by when we first bought them, with the member who
brought each one to the club:
| Since | Company (presented by) |
| 1994 | Walgreen (Evelyn, who has been going to the same Walgreens for twenty years) |
| 1994 | Merck (Gloria, our pharmacist) |
| 1995 | NationsBank, which became Bank of America last fall. We went to bed owning a Charlotte bank and woke up owning a much bigger Charlotte bank. (Frances) |
| 1995 | Lowe's (Delphine, who knows every aisle) |
| 1996 | Coca-Cola (Ruth. The one we argue about.) |
| 1996 | Johnson & Johnson (Marisol) |
| 1997 | Intel (Tanya, our youngest, who talked us into our first computer stock) |
| 1997 | Wrigley (Bernice, who admits she mostly liked the gum) |
| 1998 | Medtronic (Gloria again) |
| 1998 | Paychex (Carolyn, our CPA) |
| 1999 | Harley-Davidson (Jeanette. Yes, Jeanette. She rides.) |
At the September valuation the club was worth $41,612, against $29,400 that we've put in since 1994.
One unit, which cost $10.00 when we started, is now worth $19.64. That is not the kind of number that gets you
a book deal, but it is honest. After last year's news about the Beardstown Ladies and their arithmetic,
Carolyn runs every figure twice and I run it a third time.
This Year So Far
- When the Dow closed over 10,000 for the first time on March 29, Bernice brought a cake to the April meeting with
"10,000" on it in pink icing. We ate the zeros first.
- The Federal Reserve raised interest rates in June and again in August, and the market has been jumpy all
month. We talked it over and did what we always do: nothing different. We invest every month, and we don't
try to guess the market. Nobody can, and we are not going to be the first.
- Y2K: A few members asked whether we should sell everything before January. We asked our broker, read
up, and voted no. We did agree that everyone should keep her own statements in a folder at home, which is a
good idea anyway.
- Please keep Gwen's sister's family in your prayers. They live in Rocky Mount, and Hurricane Floyd's
flooding put water up to their windowsills. They're safe and staying with Gwen. The club voted to send $150 from
our social fund to the Red Cross for flood relief.
Want to Join?
Our partnership agreement caps us at fifteen, and we're full, with a short waiting list. But we'd love to help
you start your own! That's how the Magnolias began, and it's the best thing we ever did with $30 a month.
NAIC has materials to get a new club going, and several of us would be happy to come to your first meeting
and show you how we do an SSG. We read Better Investing, NAIC's magazine, every month, and our favorite
book for beginners is still Peter Lynch's One Up on Wall Street.
Read the minutes of our September meeting »
Write to us: [email protected]
   
visitors since March 1997
Last updated Sunday, September 19, 1999
We are a group of friends learning together, not financial advisors. Please do your own homework before you buy anything.
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The Twelve Magnolias