Investment Clubs

[ November 24, 1999 ]

The Tricky First Purchase

By Stuart Watson (TMFTiger)

The time for procrastination has come to an end for The Motley Fool Staff Investment Club (TMF SIC). Following our November meeting, the electronic voting process began to decide what would be our first purchase. The four original recommendations made at the October meeting were thrown into the pot.

To refresh your memory they were British Aerospace (BA.), Chorion (LSE: COR), GEC (LSE: GEC) and Tesco (LSE: TSCO). As well as putting forward their case at the October meeting, the proposers for each stock have also expressed their views on the TMF SIC message board. Other members and Fools at large have also had their say. Unfortunately no new ideas were put up for applause/abuse at the November meeting so the first purchase came from the October quartet. Some tentative suggestions were made for future analysis but it looks like most Fools are keen to do their homework extremely thoroughly.

As for the voting process, it was decided that a simple majority was all that was required in order for us to part with our cash. The voting was keenly contested with some participants being noticeably keener than others. But it was a fair fight, for the most part anyway. The final results were:

BAe             2
Chorion         3
GEC             6
Tesco           8
Abstentions     1

So Tesco wins the day, just. This decision has split the Fools down the middle. Some think 'Aaarghh! A retailer!' and 'Food is toast' whilst others think that the UK's leading supermarket has potential to stretch across a broad range of goods. Surely a rebranding to Tes.co.uk is in the pipeline?

We've purchased 543 shares in Tesco at 182.75p. The next few hours of trading went against us, but that's the way it goes sometimes. Fortunately our investing horizon extends beyond teatime. They'll soon be enough cash in the club piggy bank for a second purchase of £1,000. We're looking forward to our next meeting when proposals for our second victim, erm, company will be put forward.

Below are the full minutes of November's meeting, brought to you in glorious Eaglevision.

Finally -- Hear ye, hear ye. Calling all London-based investment clubs. If you're interested in having one of the Motley Fool staff talk at your next investment club meeting, speak up now or forever hold your peace. In 100 words or less, simply tell us "What's the most important thing you've learnt in setting up your investment club."

We'll pick the best responses, and your prize will be a Foolish visit and talk at your next club meeting. Second prize will be two Fools, and third prize will be a trip for the whole investment club to a location...

Ooops. We got a bit carried away there. Seriously, send your responses to Phil Southgate at PhilS@fool.co.uk. We look forward to hearing from you.

We're slightly breathless after our first purchase. Help us out on the club's message board.

The Motley Fool Investment Club

NOVEMBER MEETING MINUTES

Location: Room 6, 79 Baker Street
Time: 13:00 hours
Date: Wednesday 3rd November

In Attendance: Bruce Jackson (Foolish Rugby correspondent); Chris Spink (Foolish AIM advocate); Ewan Wilson (Foolish techie troubleshooter); George Row (Foolish deramper educator); Norma Boylan (Foolish expenses evaluator); Rob Davies (Foolish Somerfield sufferer); Adrian Gordon (Foolish tile designer); James Carlisle (Foolish former IFA) and Stuart Watson (Foolish bean counter). Who are these Fools?

1. Apologies for absence
   
   These were received from Keith Milner, who was off strolling, Winfried Rauter, who apologised for the war as well, Toby Mason, who provided two tubes of Jaffa Cakes instead, and Martin Wake, who was on holiday in the Big Apple.
   
   Nothing was heard from Alan Oscroft, off in Thailand, David Berger, on the radio, Nick Jenkins, in Jersey, Phil Southgate, in a flower-bed, Renée Rosen-Wakeford, in America, Angussb, in the Philippines, and Nigel Roberts, until later.
   
   
2. Minutes of the previous meeting
   
   The Hon. Sec was thanked and asked to do the next lot in a different font. But he's forgotten!
   
   
3. Matters arising
   
   
   1. Selection of broker.
      
      It was unanimously decided that the club would use a number of Internet-based brokers rather than select a single broker. Cost and quality of service would be two key considerations. The chairman also noted that no brokers he had looked at offered Crest membership.
      
      
   2. Application to join ProShare.
      
      Names and addresses, necessary to action this, are to be taken from those listed in the public folder of Outlook. Any changes should be sent to the secretary.
      
      
   3. Outstanding contributions.
      
      George Row was named and shamed (although he has since paid up).
      
      
   4. Membership.
      
      Adrian Gordon (Foolish techie) and Angussb (now TMFLost) have both been welcomed to the club. The treasurer said Angus didn't have a sterling account at present but is finding a way to send his payments in. This means membership stands at 20. We're full and no new members can be accepted.
      
      
4. Treasurer's report
   
   TMF Tiger told the club that there was £1,800 in the bank account, with some outstanding contributions still to come in.
   
   
5. Investments
   
   The club will invest in lumps of about £1,000, it was decided. This allows a new investment to be made every 2 months. The optimum portfolio was not decided but 8 to 10 stocks was a rough guide given.
   
   Unfortunately no new candidates were presented to the club. Updates were given on last time's companies: GEC/Marconi, up 7% since the meeting; Tesco, down 3.2%; Chorion, up 19%; and British Aerospace, down 12% since the meeting.
   
   Other suggestions were made. James C might look at Yahoo! (NASDAQ: YHOO). Adrian will keep a watching brief on Marks & Spencer (LSE: MKS) and his Cambridge LED concern. Bruce might tackle Royalblue (LSE: RYB). And Chris is considering Intelligent Environments (LSE: IEN).
   
   Regarding choosing a share, voting is to be done electronically, with a shortlist made if necessary, for instance if there is a tie. (The chairman has since keenly moved forward the voting process. Only a few votes are still outstanding. Should we make a deadline for future votes, say within a week of the ballot paper being distributed?)
   
   
6. Any other business
   
   There was not time to choose any more biscuits. Toby was thanked for the two tubes of Jaffa Cakes he bought despite absenting himself from the meeting. Any proposals for the next meeting are welcome.
   
   
7. Date, time and location of next meeting.
   
   The next meeting will be held on Wednesday 1st December at 1pm, in a near-office location to be decided. Hop-related drinks may, or may not, be involved.