Serious investors turn to stock clubs


June 14, 1993|By Wayne Hardin | Wayne Hardin,Staff Writer

A photo caption with Monday's Today section story about stock clubs misidentified a member of the Towson Investment Club. The man pictured was Ollie Sjoberg.

The Sun regrets the errors.

Nine women, organized and intent, meet in a Howard Community College classroom in Columbia. The meeting is run by agenda. The women sit at desks in rows. Everybody has a stack of reports and a specific responsibility. The secretary records the meeting on a laptop computer.

The Women's Investment Growth Club is in session.

Ten men, relaxed and playful, gather around a poker table in the basement of Towson Elks Lodge 469. One brings a trick golf club, one carries a folder of stock reports and a Wall Street Journal, one shuffles a deck of cards that had been left on the green felt table, one tells jokes.


"Doesn't seem much like a meeting of an investment club, does it?" member James Dyer says.

But it is. The monthly meeting of the Towson Investment Club comes to order, President D. Paul "Pete" Brooks presiding.

There are two styles here, but one noble purpose: making money.

Investment clubs are the Rotisserie Leagues of Wall Street, but the members don't draft baseball players. They draft companies, and the stakes are considerably higher. The clubs are a growth industry in Maryland and the rest of the nation 32 years after the National Association of Investment Clubs (now the National Association of Investors Corp.) beganin Detroit.

More than 300 investment clubs involving 5,000 people exist in a 50-mile radius of Baltimore, says Katherine Philipp, a spokeswoman for the Maryland Council of the national association.

Ms. Philipp is an original member of the Women's Investment Growth Club and also belongs to a club connected with the Maryland Council.

"Most people are pretty serious," she says. "At the same time, there is an element of socializing."

However, NAIC literature warns, "anyone who regards the activity as simply 'a night out' presents a problem for his or her Club and may hinder its progress."

A club amounts to a partnership. You pay your money, you meet monthly, you study the stock market and individual companies, you make consensus decisions, you probably have to get a stockbroker when the portfolio gets big enough.

But the basic idea of investment clubs revolves around assembling 10 or 12 members who together have more money to invest.

"I'd been interested in the stock market for a long time," Ms. Philipp says. "A club was a way to get into the market without a lot of money."

Monthly contributions

In the Women's Investment Growth Club, each member contributes $35 monthly; at Towson, it's $200 a year; North Carroll Faculty Investment Club members kick in $40 every six weeks; the Women Investors of Severna Park put in $20 each a month. The "ideal" number of members is 12 to 18. "With more than 25, running a meeting and reaching a consensus can be cumbersome," Ms. Philipp says.

The "controlling body" for all this is the nonprofit NAIC in Royal Oak, Mich., which lists a membership of 9,862 clubs (and counting) and says the average club regularly outperforms the stock market index. It provides -- free or for a fee -- such things as investor manuals, advisory services, a monthly magazine (Better Investing), study programs, "time-tested tools for do-it-yourself financial analysis" and even an insurance bond in case a member decides to go off with the club's portfolio and become an individual investor.

The national association lists this "profile of membership": almost equally male and female; 53 percent with college education; 90 percent with a family income of more than $25,000.

Maryland clubs seem to fit the general profile. The Towson and Women's Investment clubs offer some contrasts within the framework.

Towson, with 15 members, is one of the oldest clubs, founded in 1952. Women's Investment, made up of 13 women professionals, dates to 1985.

The men's club operates its meetings in what Mr. Brooks, its president, calls a "very loose" style to deal with the eight stocks in its $27,000 portfolio; the women's club meetings are friendly but brisk, focused, structured. A member is assigned to follow each of the 16 stocks in the $50,000 portfolio. They also do detailed analyses of stocks that might be purchased.

The two clubs have only one stock in common: Baltimore Gas and Electric Co. Based on current value vs. cost, a big winner for Towson is Sprint; Women's Investment has three: Disney, Kellogg and Lukens.

Club with camaraderie

Mr. Brooks, 72, who has retired three times and still works part-time in his Cockeysville real estate and insurance business, is Towson's oldest member by age and club longevity. "I joined in 1953," he says. "It cost me $110 to get in and I'm still in it. I enjoy the camaraderie."

Women's Investment has one member in her 70s ranging down in age to Julia Breed, 29, of Annapolis, who joined last year. Her mother, June Winkler of Catonsville, is an original member.

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