BI > NOVEMBER 1998

There's always plenty of enthusiasm at the start of an investment club. But the members of the Our Just Desserts Investment Club in Fremont, Calif. were determined to keep that initial spark going.

"We began setting our goals at the very first meeting," said Sue Schmidt, the club's junior partner. "We decided that we weren't going to become millionaires, but that we were here to learn. And we knew that we needed to make it a lot of fun. If it's not fun, people won't keep coming."

So, the all-women club made "fun" one of its goals. "One of our goals is to have really good food at each meeting, because to us, that's fun," she said. "So, every meeting is a potluck, with a focus on desserts and chocolate."

Each month, the stock study and culinary duties are split, with half of the club's members bringing a stock to investigate, and the other half coming with a contribution for the potluck. "That way, we share the responsibility of the stock study and everyone contributes," Schmidt said. "When you get the chance to contribute, you also get a lot out of it." And, so that no one feels undue pressure when things get crazy in their lives, the club has invented its own "Get out of a stock presentation free" card, which each member can use once a year. "Whether it's a wedding or a family vacation, we know we're all busy, and this is a way to relieve the pressure a little bit," Schmidt said.

This club has a serious side, however, that's not to be overlooked. "Beneath the crazy atmosphere is a very solid structure," Schmidt said. "We elected officers at our very first meeting, and planned the dates of our meetings for the whole year. By our second meeting, we had our partnership agreement together. And our agenda is always very organized."

And, though they haven't yet reached their first anniversary, members have already come away with a few lessons well learned. "One of the things we've learned is that you can't buy stock because one club member is a better salesperson than another," Schmidt said. "You've got to go by the information, like the company's P/E ratio and Value Line data."

Club members have also turned their focus toward diversification. "That's another of our goals," Schmidt said. "We live in the Silicon Valley and many of our husbands work there. So it was just natural at first to buy computer and Internet stocks, like our first purchase, Infoseek Corporation."

Since then, the club has added companies like The Walt Disney Company, Helen of Troy, Iomega and Serologicals to its portfolio. "We know that diversification helps, especially during a turbulent stock market, like the one we've been experiencing lately," Schmidt said. "We know we're in the market for the long term and that, over the long run, our economy is solid. When the market dips, we stick it out, we don't panic. Matter of fact, we're really excited. We figure we'll find some real bargains out there."

As it was from the beginning, education is still the focus. "Some of the club members took a trip in June to Monterey for the NAIC seminars," Schmidt said. "We brought back copies of Better Investing and highlighted the sections that had been the focus. We taught what we had learned to each club member who couldn't go. That way we share the knowledge."

One of the tools the members brought back from Monterey was the Stock Selection Guide. "We're slowly learning how to use the Guide," Schmidt said. "We're finding it's a very good way to determine the value of a company."

It was exciting and a bit ironic that Beardstown Ladies' Betty Sinnock was one of the seminar's instructors. "It was the Beardstown Ladies' book that got us started," Schmidt said. "We bought one copy, passed it around and used it as our Bible."

They also picked up a few tips, like watching out for companies with high debt. "And we learned that if we have a question, we can go ahead and call the company's investor relations department directly," Schmidt said. Learning is also a part of every club meeting. "We try to do a little bit of teaching, keeping in mind that many of the members have just gotten off work," Schmidt said. "So, it's not a long lecture."

Recently, Schmidt conducted a short lesson on the various stock exchanges. "Everyone groaned when I told them there would be a test," she said. "But they perked up when I told them there would be prizes, too. I knew that a test would help to reinforce what we had learned."