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American Morning
More Than 30,000 Investment Clubs Operating Around Country
Aired July 24, 2002 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: The bears may have control of Wall Street right now, but there are still plenty of folks on main street who are bullish. There are more than 30,000 investment clubs operating around the country, ordinary people pooling there money, seeing bargains where other see a bust.
And Elaine Haddad's Blue Chip Investment Group is going strong, seven years after it was formed. She joins us now from Boston to talk about her club, their strategy for investing in these turbulent times.
Good to see you, Elaine. Good morning.
ELAINE HADDAD, BLUE CHIP INVESTMENT GROUP: Good morning, Paula, how are you?
ZAHN: I'm fine, thanks. Are you beating the market these days, I hope?
HADDAD: Are we beating the market? Well, we are learning about the market, and we are educating ourselves, and we are feeling right now that we have lost a lot of trust in some of the methods that we always got basic fundamentals.
ZAHN: Have you lost a lot of money in the process?
HADDAD: We have lost some money in the process. We've learned a lot. We've also made money. So I would say our portfolio from the beginning of time, which was 1995, is slightly down.
ZAHN: That's better than a lot of people are doing out there.
Now, let's talk a little bit about your strategy, because you originally started with 11 woman in the group, and you invest $40 a month a piece.
HADDAD: That's correct, $40 a month a piece, And we take the money and invest it in strictly stocks, securities that we research with tools from the National Association of Investment Clubs.
ZAHN: Now, one point among one of the stocks you were invested in was WorldCom, and then you sold it six months ago. What lesson did you learn from that little investment exercise?
HADDAD: We learned a lot from WorldCom. We learned that we should know the product better than we did in that case. We really did not understand the technology. We really didn't understand the product or the service that they offered. We also have learned that we should trust our instincts as well as looking at numbers, because sometimes the numbers are misrepresented.
ZAHN: Yes. I guess that's been proven in a number of cases, unfortunately, recently that everybody has had to deal with.
So the bottom line, how much homework do each one of you individual investors do before you decide as a group to check out a new company or stock?
HADDAD: Because we are investing $40 a month -- that's not a lot of money -- it takes us about three or four months to come up with recommendation to purchase the stock. And we are very careful in using good research tools, reading the news, and using our instinct in the market and using products that these companies have offered.
It takes about three months' time, and it's a four-member committee that researches the company, and we are very diligent in making our recommendations to the group. Everybody looks at, looks at our presentation, and makes a decision about how much money we want to invest in that company. Sometimes we purchase 100 share, sometimes we purchase only about 25 share of a company. Sometimes we're trying a company to see how it is going to fair in the market, such as the environment today.
ZAHN: So you're not giving up. You're hanging in there.
HADDAD: We are not giving up.
ZAHN: You are planning to buy more?
HADDAD: Absolutely, because we know the market will survive. It has gone through times like this before. It will be here in another 10 years. this market may not turn around for another five years. But we feel that long-term investing is the key.
ZAHN: And for you, long term for each of your individual investors means what, 10, 20 years out?
HADDAD: Ten, 20 years out, and we're staying with that.
ZAHN: Good for you. I think we could all learn from your sense of patience, as the rest of us suffer whiplash, but I think it's great you haven't lost a lot of money when a lot of folks have lost their whole entire nest eggs.
HADDAD: We haven't lost a lot of money, but we have lost trust, and we are learning to work with our own instincts much better than we used to, and we do hope that changes in the government will help the corporations report more accurately to us.
ZAHN: Well, continued good luck to you and the blue chip investment group. I hope when we talk a year or two down the road, your portfolio are way, way up. HADDAD: They will be.
ZAHN: Good.
HADDAD: We do believe in 10 years, we'll be sitting talking to you about how much money we've made.
ZAHN: And you might be siting on a yacht talking to us.
HADDAD: I hope you invite me back.
ZAHN: We will. Nice to see you, Elaine. Thanks for your time this morning.
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