Club of the Month: May 2002

Babes Doing Wall Street

CHICKS: When did you start your club and how did you all meet?
BABES DOING WALL STREET: In October 2000, during a ladies cropping weekend in the mountains, we began talking about starting an investment club. We did some research and ordered some books to read. We pre-ordered the Chicks book before it was printed. We had forgotten we had ordered the book and when it arrived in April 2001, we knew exactly what to do. We had our first meeting on June 16, 2002 with 4 members and decided that we wanted to have 15 members. We talked to all our women friends and had no trouble finding 15 ladies with the same interest. As it turns out, 7 of us go to the same church, but many of us did not know each other until we began our club.

The make-up of our club is very exciting. We have 4 mother-daughter couples in our club. We also have a club member who recently gave birth to twins - and is still able to attend our meetings.

15 members? Why so many?
When we started our club, we did not want our monthly dues to be more than $25.00 per month - at least until we figured out what we were doing. We also knew that at first, we wanted all members to contribute the same about of money. So, we thought we had better get as many members as we could to be able to build enough cash to make a quarterly purchase. We felt like 15 would be enough, giving us at least $1,000 each quarter to invest.

What are the advantages/disadvantages of having a larger club?
One advantage of having 15 members is that you collect more dues for investment purposes. You also have a lot of people with different strengths that can add value in their own unique way. It makes it easier for everyone to do just a little bit, instead of a few people doing all the work.

The biggest disadvantage is staying in touch with all 15 members. We sometimes lose touch with some of our members in between monthly meetings. Not everyone has gotten into the habit of checking the message board regularly or posting replies.

Having 15 members may not work in all cases. We are very lucky. All of our members are committed to our club. A disadvantage of having so many members could be the risk of some of them dropping out. Fortunately for us, we have been together almost a year, and we are all still committed 100% to our club.

Where are you all located?
Most of us live in the suburbs of Atlanta, Georgia. However, one of our members lives in Florida year-round and another member lives in Florida 6 months of the year.

What prompted you to start a club?
We wanted to find a way to make money and wanted to learn more about investing in the stock market.

How do you meet? Online, or face to face?
We meet on-line for two months and the third month, when we are going to make a purchase, we meet face-to-face. When we started our club, our goal was to have 10 on-line meetings and 2 face-to-face meetings each year. However, we decided that we needed to meet at least 4 times a year so we could get to know each other better.

How did you come up with your name?
At our very first meeting, one of our main goal was to determine a name for our club. We brainstormed until we came up with Babes Doing Wall Street. We thought it was a little humorous and signified women in power. The name stuck.

Tell us about your portfolio.
We have made 3 purchases. We have made money on one stock and have lost money on one. The third is a very recent purchase, so, time will tell. Overall, we are "in the hole" just a bit, but we are optimistic that with our "buy and hold" strategy, we will do well in the long run. One thing we have done to try to ensure we make good, sound investments it to establish a Validation Committee.

Explain more about your Validation Committee.
The Validation Committee consists of 4 club members. When we are ready to make a purchase, the club votes on 2 to 4 stocks. The Validation Committee then does some final research and analysis on the stocks the club voted on. The Validation Committee makes the final decision based on their research of which stock the club will purchase. This has worked very well for us.

What has been the greatest benefit of being together as a club?
The relationships we are building with each other and what we are learning from each other. Each of us brings our own strengths to the club and makes a contribution to the club in these areas. We are learning a great deal about money and what it takes to make money. We all feel a sense of accomplishment in working together with a specific methodology to make decisions on stock purchases.

What challenges have you had to deal with?
Our greatest challenge is staying connected and getting all 15 of us in one place at the same time. We try to stay connected through the message board and email, but we are all so busy that sometimes it is hard to check the board and email. We make up for it in our meetings.

Any advice for new clubs?
The best advice we can give is to use the Chicks Laying Nest Eggs book as a guide and to set your club up on the Chicks website. When we first started researching how to start a club, we were a bit overwhelmed at how to get started. The Chicks book is very easy and fun to read and gives you the blueprint for starting your club. The website provides an wonderful vehicle for your club to get organized and to stay connected with each other. Why reinvent the wheel. Also, find people who are from different walks of life with different strengths. This will help you elect the right people for the right positions in your club. We have a great group and everyone carries her share of the load. It keeps things running smoothly and makes it a lot of fun!!