Investment club

>>>>>1. Start an investment club within our chapter. Investment clubs require
little work (mainly studying the health of stocks and exchanging information
on making better money). Peter Lynch in "Beating the Street" pointed out
that the investment clubs beat the S&P Index by 20% on average. The reason
is simple, The funds are required by Securities rules to limit any large
holdings in particular stock to 4%, so they can't put as many money as they
like in stocks with excellent value. Also, the fund manager must manage
thousands of stocks listed on single spaced page the can fill 4 yellow pages,
so the best pickers just can't put in as much time into good research on>>>>>

I seriously recomend a book that I recently started reading, called
Buffetology, by Mary Buffet, I think. The book outlines a sensible plan for long
term investment. Over the course of about 30 years, Warren Buffet was able to
transform $100,000 worth of family savings, into an industrial empire that is
today valued at $20 Billion. I have yet to study the book in detail, but here is
what I have learned so far:

1) Warren chose to invest in companies that he considered to have, excellent
business economics. He would only buy shares in companies that could
consistently generate a 15% or greater, rate of return.

2) He would avoid commodity type companies. Commodity type companies sell basic
products like maize or petroleum. Since one companies maize is the same as
another (there are no meaningful brand names), there is fierce competition
between rival companies. This destroys profit margins, and ruins rates of
return.

3) (Yearly dividend per share / price you originally paid, per share) = rate of
return.
What this means is, the price that you originally pay for a share, determines
your rate of return. During market scares, share prices of certain companies can
dip quite low, even though the economics behind the company is sound. Warren was
not fooled by this. He knew that market scares were simply caused by 'sheep
jumping ship'. Long term market investors would wait for a companies share
prices to fall, before they start buying.

4) Be patient. Do not expect to be able to build a financial empire within a
few years. I am 21 years old, probably one of the youngest people on this list,
and I don't expect to be a billionare before I am a grandfather! It took Warren
Buffet years to build his financial empire.

Those are the basics, as far as I could understand them. I seriously recomend
the book. I managed to get a copy from a discount shop in London, for just 2
pounds. I think the normal price of the book is about $20.

More information on this in due course.

Tony

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