BI > NOVEMBER 2005

Staying Current in the Stock Market Since 1959

Real-life Stories From Clubs and Individuals

In 1959 a group of employees in the engineering department of Alabama Power Company decided they would like to learn about the stock market. The group decided the best way was to form an investment club to educate themselves about stocks.

Charter Members of the Power Investors Club. Pictured are, from left: Jack Wisdom, Henry Holman, Sal Marino and Jim Duke. Not pictured: Luke Owens.

A set of by laws was written, and in June we had our first meeting, which generated a membership of 30. Since all the members worked for an electric utility company, we selected the name Power Investors for the club. We began with each member having an equal share and investing $15 a month. Some members dropped out early for various reasons.

In 1972 one of our members wrote a computer program we used to convert to a unit system. We set the unit value at $10, and by June 2005 the unit value had grown to $284. As the club grew each share was split, and the monthly contribution for each member increased to $20. This was done to attract new members. We allow each member to invest any amount monthly, as long as it's in multiples of $10. With the unit system, a new member can join with a minimum investment of $300.

As the club value began to grow, we had no trouble maintaining our membership at 30. During this time an article on the club was published in the Alabama Power Company newsletter that encouraged more employees to join. The club voted to raise the membership limit from 30 to 40. Today we have 38 members -- 36 men and two women, with only five original members remaining.

As of June 2005, the club value was $1.5 million, made up of 40,000 shares of a diversified portfolio with an invested value of $600,000. Over the years the club has paid out $1.5 million to members. In 2004 the club received an average of $2,400 monthly in stock dividends and $4,500 in monthly contributions from its membership. We follow BetterInvesting methodology for the study of stocks and our broker provides us with stock data and advice when asked.

In October 1989 the club won the top award in the annual portfolio contest sponsored by Value Line. Value Line paid for our treasurer to attend the BetterInvesting National Convention in Minneapolis, Minn. to accept the award.

On June 23, 2005, Power Investors members celebrated their 46th anniversary with a dinner meeting.

by Jack Wisdom, Power Investors Club