In 2006 I summoned the usual characters from the neighborhood. After a few adult beverages, I floated the concept of forming an investment club. The main purpose was camaraderie. The secondary purpose was to pool some discretionary investment income together and learn together as we bought and sold public traded companies. We decided to officially organize and have company officers. We landed on Big Kahuna, FooFah of Finances, Rush Chairman, High Priest of Education, Honcho of Minutes and one other role I can’t seem to recall. However, rest assured; it was equally as important as those mentioned.
We had a good run. We made some money and lost some money. Most important, we met our primary objective of camaraderie. It was a sanctioned Guys Night Out. Most of our profits were spent on the many vices we were already paying for outside the investment club. We kept a good game face for a few years, and then the bottom fell out.
We attempted to salvage the tail spin of our investment portfolio by placing bets on sports events in Las Vegas.
Slowly we all began to retreat. The meetings became fewer and farther between. Participation waned. The camaraderie became so low we had a few meetings to discuss dissolving the investment club altogether. It has been a long time since we have gathered and even longer since we came together excited to buy or sell some stock. The economic environment has taken a toll on our investment club participation, our confidence making wise investment choices given an uncertain landscape and as a result we have left our portfolio in all cash.
We have watched neighbors struggle to find jobs; homes foreclosed and stay at home moms go back to work. The investment club exists on paper but the spirit has been hijacked. Do you see any similarities in your neighborhood, workplace or investment club? Is it likely that our investment club is a microcosm of families across the country?
This economy (The Great Recession) has become a great dream stealer and in the still of the night has decimated hope for many across the country. The safety net has been removed and anxiety is at a high level in kitchens across the country. Conversations of career advancement, promotions, bonuses and pay raises are supplanted with paying off debt, extended retirement dates, how to pay for college, delaying decisions to replace aging cars and equipment. Cash in the bank is more important than a newer model car in the driveway or an exotic vacation. When the consumer hoards cash our economic growth stalls and the fun meter low level light illuminates.