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Minutes and other details - Happy Turkey Day to all! Nancy
There are two items that weren't discussed that probably should have been,
but here they are:
NAIC Insurance (aka Fidelity Bond) -- Do we want coverage for 2001? For
$75,000 (cost -- $154) If we decide we want it again (and I think it is
prudent to get it) we will need to perform an audit, so I suggest the audit
committee be reconstituted (Nancy, Gary, Jim and Kathe) and review the books
while our Treasurer is in town in December -- possibly immediately
before/after the December meeting?? Or whatever time works for everyone.
Virginia Registration as a Partnership - We should vote to authorize the
registration. Unfortunately, it appears we owe a penalty again this year,
so we'll have to keep a record for next year so we get in the fee by
September 1, which is the deadline.
Minutes, HPD Meeting: November 19, 2000
Called to order at 5:45 p.m.
Present in person/voice/proxy: Greg Gainer (Kathe Larkin's proxy), Gary
Walker, Matt Olson, Nancy Montague (Jim O'Connor's proxy), Sean Thomas, Joe
Approved minutes of October 29 meeting.
We have $647.63 in Presidential and $60.42 in Ameritrade, for a total of
$708.05 in cash. Our stocks are worth $61,446.44, and valuation units
are $21.1229 -- about the same as last month.
Current holding reports: some emailed ahead of time. No questions raised.
Discussed switching brokers. Given lack of urgency (Ameritrade has fees we
don't like but appears to be otherwise working well) so agreed to table
decisions on possibly switching brokerages for one more month. Any input on
options, feedback from AmEx customers, Gomez, etc. still welcome.
Portfolio evaluation - still pending;
Economic report: Nancy reported excerpts from a feature on Valueline's site
(an addendum to the minutes):
Also: the Fed did not change the funds rate; inflation numbers for last
month were low.
Also, on valueline.com you can download the Dow 30 Valuelines for free (in
adobe acrobat) - our only holding in the Dow 30 is Home Depot, Jim.
Education: Nancy reported that she went to an NAIC workshop on club
education programs and got some handouts and some ideas that she will share.
Also, the NAIC Investor Fair is coming up in March, 2001 at the U of MD
campus. Information is available at the better-investing.com website under
the link for regional associations and DC National Chapter.
There is an upcoming (April, 2001) NAIC course that may be of interest to
ADDING JUDGMENT TO THE SSG
This half-day seminar will improve participant's judgment skills on the five
key SSG decision points. Prerequisites: STOCK SELECTION GUIDE WORKSHOP or
STOCK SELECTION GUIDE II
Nancy will provide details at the next meeting.
Also, apparently it is possible to download from say, Investorama.com, the
information necessary to develop a stock analyzer form even though it is
designed for the NAIC stock selection guide program. Joe said use version
3.2F and "import without lines" - so good luck.
Stock presentations: Greg presented Immunex, but the decision was made to
wait and reconsider biotechs in December.
Next Month: DECEMBER, 2000
Industry Focus Biotech still under consideration. Joint effort - Sean, Joe,
Greg & Nancy. Others welcome. (Amgen; Biogen; Immunex; Genentech; Kyron??
Annual Reports due:
Lucent - Jim
RHI - Al
Dollar General - Al
Cisco - Matt
So far, nominations were made for:
Treasurer: Gary Walker and Sean Thomas
Secretary: Matt Olson and Jim O'Connor
Vice President: Nancy Montague and Gary Walker
President: Kathe Larkin and Nancy Montague
Does anyone else want to toss their hat into the ring or pull their hat out
of the ring? Or nominate someone else?
The slate shall remain open until Tuesday, November 28, 2000 at midnight
(EST). After that, the actual election shall be conducted via email. And
Next meeting: Under consideration is Sunday, December 17 at 5:30 at Jim's
house in Arlington.
Adjourned: 7 p.m.
ECONOMIC AND STOCK MARKET COMMENTARY (November 10, 2000)
The economy has moved onto a slower growth path as we near the midpoint of
the fourth quarter. This point was underscored recently by the release of
data showing that GDP rose by just 2.7% in the third quarter, a gain that
paled against the 5.6% rate of increase registered in the April-to-June
period. Interestingly, consumer spending, which accounts for about
two-thirds of total domestic output, actually rose more sharply in the
recently ended period than it had in the second quarter, suggesting that the
U.S. economy is not in danger of slipping into recession anytime soon.
We expect growth of 3%-4%, on average, over the next 12 to 18 months. That
would be a somewhat faster pace than during the preceding quarter, but it
would clearly be a less vigorous level than over the past few years. In all,
such a rate of business activity, which incorporates continued strength in
housing, a likely falloff in manufacturing, and restrained growth in
employment, would likely keep the Federal Reserve from raising interest
rates over the next several quarters. But any material deviation in growth
from such a pace would quickly catch the eye of the Fed and probably lead to
a further rate adjustment.
Meanwhile, the recent earnings season has come and gone and, for the most
part, the results were reasonably good, with the majority of companies
reporting earnings that were either in line with expectations or better than
those forecast. Such a respectable showing was certainly an encouraging
development for a shaky stock market, particularly since the gains evolved
in a weaker economic setting. But investors are rarely worry free, and even
as these good reports are being released, fears are rising about the current
quarter, as the economy shows few signs of shaking off its recent lethargy.
Cautionary words from some managements, which accompanied the profit
reports, only added to the sense of foreboding as October came to a close.
With earnings multiples having come down, after two months of steadily
eroding prices, the market setting is potentially less troubling. But in the
absence of further earnings support, it is unclear just how much of a
reversal we will enjoy.
We advise keeping 60%-70% of your portfolio in stocks ranked 1 or 2 for
Timeliness with the remainder in cash reserves and Treasuries. As always,
investors should take into account the length of their investment horizon as
well as tax considerations in making their equity allocation.