Investment Club Scores Gains, Has Fun

by Mark Friedman  on Monday, Jun. 23, 2014 12:00 am  

The investment club started trading in 2011. Some of its central Arkansas members include, from left, Vernon Scott, Scott Schuldt, Daniel Robinson, Lee Welfel, Dr. Cole Brucker and Matt Black. | (Photo by Jason Burt)

One of the current debates within the group is what to do with its shares of Under Armour Inc., the sports clothing and accessories firm based in Baltimore. Its stock price is up about 75 percent since the club bought it.

“We have some of the guys who want to dump it and go over to Nike,” Welfel said. “So now it’s like a daily debate. People are taking pictures of kids that they see in Under Armour gear and sending it out to all the other members of the group.”

Discussions over what to buy or sell go on all day. Group messages easily reach 200 a day — and sometimes more.

“Every single one of our wives hates it,” Robinson said of the constant messaging.

But the debate over what to do with Under Armour highlights the problem of selling a stock. Robinson said investors in general — not just those in the club — have a hard time knowing when to sell.

“People get emotionally attached to stocks,” he said. “If it’s down, they want it to come back. And if it’s up, they think it’s going to continue going up.”

Brucker, the ER doctor, said members of the group hold conflicting views about when to sell “a loser.”

Sometimes before a stock is bought, a target price is set, and the group sells when the stock reaches the goals. Other times, however, the stock hit its target goal but the group didn’t sell. Then the price dropped to the level at which the club bought it, Robinson said.

Welfel said the decision to sell is decided by a vote or by “making fun of each other” until a holdout member agrees to sell.

Goals

The group now is working on assigning members sections of its portfolio, which has about 20 stocks in it.

“Right now, we’ve got a few people that watch everything,” Welfel said. “We’re going to segment it out. … That will help keep the meetings shorter and more on topic.”

 

 

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