The Frisco Rock-N-Stock ClubJul 01, 2016 ● By Karen Thomas
Founding member Sue Allen says, “I was working at Compass Bank Frisco at the time and had a National Association of Investors Corporation (NAIC) magazine called BetterInvesting, which I used as a guide to create the club. It is a monthly publication that contains investment news, company reviews, stock and mutual fund analysis and educational features. It was a great resource to help get our group started, and still offers readers timely advice. The well-known Beardstown Ladies Investment Club was also an inspiration to start a local group. I started talking with friends to see who might be interested. I wanted to bring in a variety of women who would contribute to the club a variety of interests, experiences and perspectives.”
Ms. Allen adds, “I may have spearheaded the club, but I did not do it alone. I had a lot of help! Sue Williams, Betty Mitchell and Brandi Bowman were also instrumental in helping get this group established. The Frisco Rock-N-$tock Ladies Club started out with 12 members, including Audie Adkins, Kathy Billings, Gay Chandler, Karen Gornstein, Jo Ann Hammonds, Nattlie Hoover, D’Ann Kleinman, Betty Mitchell, Brandi Bowman, Linda Sutton, Sue Watson, and Sue Williams. Marilyn Kuhlman joined shortly after. We hired Bill Hayes of Edward Jones to be our broker to provide some advice and guidance. Because of the club, I got my Series 7 license to become a broker and have not looked back! I have since joined Edward Jones, and since Bill’s recent retirement, I now serve as the broker for our club.”
While many of the faces have changed over the years, some members have left for personal reasons and others passed away, the group is still nine members strong, with a tenth soon to join. Ms. Kuhlman says, “Two of the original founding members are still active. We also have one member with 19 plus years, one with 16 years, one with 14 years, one with seven years, two with four years and one with two years. We are a tight-knit group, ranging in age from the lower 40s to the 80s. The diversity is wonderful!”
So, what exactly is an investment club? Ms. Allen explains, “We are a group of individuals who want to learn a system for investing in stocks. There is a $100 fee to join the investment group, and members pay $50 per month in dues, which we use for our investments. We meet once a month. Each member does research on a stock they think the group might be interested in. Everyone does their homework and contributes. Then, during the meeting, they stand up and present their recommendation to the group. We have a system in place for the research process. Is it high quality? Is it junk? The whole group then votes and decides if they want or need to invest in it.”
Since she now works for the group as their broker, Ms. Allen no longer has voting rights. Instead, she serves in a role that is more of a mentor and teacher. She says, “While my function has changed, I still love being part of this dynamic group of women. I come to meetings to coach and advise, and two to three times a year, I bring in experts to bring the membership up-to-date on current topics. Sometimes, just to make it fun, we mix it up. Last year, we brought in Cynthia VanLandingham, the owner of Cynthia Elliot Boutique in downtown McKinney, for a fashion show. Another year, we had ‘Fancy Nancy’ come in, and we talked about gold as an investment.”
Ms. Kuhlman says, “I think our group owes its success, in part, to hard work and a businesslike approach to investing. There is also a purpose and we take ownership in the reports and stocks. We have a checklist of things for stocks we might buy and for currently-owned stocks. We want them to stay within certain parameters to buy new stocks or keep the ones we have. Each member does the checklist for several stocks and reports on them at each monthly meeting.” Ms. Adkins adds, “If something does start to fall off the map, we can dump it. Alternatively, if some stock is doing really great, we might invest more and see what happens. Disputes among the group are rare, as all investment decisions are reached democratically. We all have to vote on it and the majority rules. If for some reason someone’s recommendation turns out to be a stinker, there are no hard feelings. We have bought stuff that did not turn out, and there is no finger pointing because we all were in agreement.”
Ms. Chandler, whose daughter was one of the original founding members, says, “We try to diversify our stocks and play across the industry. We also look at companies where we have stocks that do support our local community. We try to be socially responsible. We try to read everything we can about companies and try to invest in ones that are managed by good people with good track records.”
The Frisco Rock-N-$tock Club ladies also take their social responsibility very seriously. At their annual Christmas party, they pool money together to donate to a local charity. Ms. Chandler says, “We each write the name of our favorite local charity on a piece of paper and put it in a hat. The charity pulled out of that hat receives the donation. We are very proud to have contributed to some very deserving local organizations.”
The ladies look at price-earnings ratios and timeliness. Ms. Kuhlman says, “We also do dollar cost averaging, which means we purchase monthly, over a period of time. We might get some high, some low, but it averages over time. Over the years, we have had our share of losers and passed on some that turned out to be incredibly successful, but our current portfolio of 26 stocks contains some solid winners.”
Ms. Allen smiles, saying, “I am not giving away all our secrets, but there are eight steps we use to meet the criteria for choosing our stocks, and it is basically common sense. One is to look at what numbers of analysts are making buy, sell or shared holds. If we decide to sell, we reinvest. Another is to look at what the price/sales ratio is. This tells you if the stock is at a good price. We also look at institutional ownerships. When it comes to investing, it is about choosing a strategy and sticking with it over the long run.”
Who is a candidate for an investment club and how do you start one of your own? “Investment clubs vary in how they operate. Some simply meet to discuss investing and discuss tips. Others, like the Frisco Rock-N-$tock Club, pool their money and follow guidelines. The important thing is to pick people who want to be involved. Anyone who is interested in learning, investing and having fun is a candidate. We are not day traders. We buy quality, long-term stocks and watch them grow,” Ms. Allen shares.
Sometimes, the stocks grow very slowly, but the group invests back with the dividends they earn. Each member has similar investing goals, and while they are in it to make money, they are also involved for the social aspect.
If you want to start your own investment club, the ladies say you should just do it! It is fun! You will need a broker to point you in the right direction. If you join the NAIC, they will get you started. You could probably stay at home and learn this alone on the Internet, but it is more fun learning together, and you get to invest with your friends, while hopefully making some money.
Ms. Kuhlman adds, “We meet once a month, so it is not a big time investment. Each month, members rotate bringing food to the meeting. We usually get some good home cooking! We have a lot of fun, we eat and we study stocks. While we take our investing seriously, nobody wants to miss the meeting because nobody wants to miss the fun! To join our group, it is by invitation only. Interested persons must attend three meetings to see if it is a fit for everyone.”
While the 20-year anniversary puts the Frisco Rock-N-$tock Ladies Club into an elite class, the ladies say that friendship is this group’s biggest asset. Every year, they save up for an annual trip to someplace fun. Past adventures have included destinations like New York, Las Vegas, Louisiana, Marble Falls and Billy Bob’s in Fort Worth. This year, they plan to celebrate their 20th anniversary with a toast and dinner at Reunion Tower in Dallas. The ladies enthusiastically agree, “People join because it is an educational experience, an opportunity to learn, and of course, make money, but, more importantly, we come away with lifetime friendships. As we head into our 21st year, we have no plans to slow down.”