Alaska Chapter Newsletter

Transcription

1 Alaska Chapter Newsletter FALL/WINTER 2007 President s Message As the end of my term nears, I would like to thank all of the volunteers who have spent many hours helping educate you, the members of BetterInvesting. We have conducted many classes in many cities; from Fairbanks, to Homer, to Palmer, to Juneau. We have created a new strong support group for the club officers and potential club officers with our Club Officers Get Together - the next meeting will be in March Club treasurers have a way to get new information, answers to their questions, and a sounding board for new ideas, through our Treasurer s Support Group. To join this group contact Joanie Risch at jrisch@acsalaska.net. BetterInvesting has developed new programs to assist new members study stocks by using the online Stock Selection Guide. They will be offering a new tool for the directors to use in teaching classes to our outlying areas such as Ketchikan, Kotzebue, Dillingham, and Juneau. This program will be available in July. Your Alaska Chapter is here to assist all BI members and clubs in the state by providing on-site classes. We will be offering classes throughout the coming year. The class schedule is included in this publication. If you have a request for any class you can contact Anne Grosshans at anneg@gci.net. I am looking forward to seeing many of you at our Education Fair on Saturday, September 29, 2007, at the Millennium Alaska Hotel The registration form is included in this publication. We are fortunate to have Gary Ball, from BI Puget Sound Chapter as our guest speaker, (see below). I wish to give a special thank you to all the Directors of the Alaska Chapter; you have made my three years as President a very enjoyable experience. THANK YOU. Patricia Hunt, President, Alaska Chapter BetterInvesting Gary Ball Is Featured Speaker at September Education Fair An individual investor for over 30 years, Gary Ball has been an NIA Director from 1994 until Gary is past president of BetterInvesting Puget Sound Chapter and a BetterInvesting club member since He taught BetterInvesting tools for over twenty years in Seattle and has been a seminar presenter at the BetterInvesting National Conventions since He was featured in Smart Money, Consumers Digest and Fortune magazines. Gary retired in 1998 as Investor Relations Manager for Fluke Corporation, an electronics company in Everett, Washington. He has a Master s degree in electrical engineering and served on the adjunct faculty at the University of Washington where he taught investment classes in the business school. Presently he runs a personal financial planning business. Title Wave Monthly Meetings Join us for a free open discussion on the first Thursday of the month from October through May as we discuss stocks using BetterInvesting s Stock Selection Guide. This is a tool for stock evaluation as an adjunct to other investing research. We use the Stock to Study from the previous month s issue of BetterInvesting magazine. A second stock is chosen by the moderator. Attendees can bring their own completed SSGs or come and share in the information presented by others. It is an excellent way to improve your SSG completion skills and understanding. All are welcome -- beginners on up! An is sent out monthly with the stock names and prices. Sign up for the free alert at any BetterInvesting function or when you come to one of the Title Wave sessions. Title Wave is located at 1360 W. Northern Lights, Anchorage AK (phone ). The dates for the coming year are: October 4, 2007, November 1, 2007, December 6, 2007, January 3, 2008, February 7, 2008, March 6, 2008, April 3, 2008, and May 1, Hope to see you there!

2 Education Calendar for Alaska Chapter 2007 BetterInvesting Education Fair Saturday, September 29, 2007 ~ 8:30 am - 3:30 pm Millennium Alaskan Hotel, Anchorage, Alaska Alaska Chapter Newsletter Title Wave SSG Discussion Group First Thursday of the month, October through May, 7:00-8:30 pm Beginning SSG Class using Toolkit 5 Karl Sopp, Presenter; Laptops invited but not required. Saturday, October 20, 2007; 9:00 am - 1:00 pm Location TBA Advanced SSG Judgment Tim Janneck, Presenter; Thursday, November 8, 2007; 7:00-8:30 pm; Location TBA On Line SSGs using the BetterInvesting Website Karl Sopp, Presenter; Saturday, January 12, 2008; 9 am 12 pm; Location TBA Portfolio Management using Toolkit 5 and the PERT Tool Anne Grosshans /Pat Hunt, Presenters; Tuesday, January 31, 2008; 7:00-8:30 pm; Location TBA Mutual Funds: What You Should Know About Funding Your Retirement Account Anne Grosshans, Presenter; Thursday, February 21 and 28, 2008; 7:00-8:30 pm; Location TBA Upside/Downside Ratio, What is it? by Karl Sopp, Alaska Chapter Board Member Well it s really an attempt to try and calculate a ratio that tells you what kind of risk you re about to take, based upon the judgments you have used on the SSG. We find this ratio is calculated for us on the second or back page of each SSG prepared in Section 4 as item D as the illustration below indicates. This one is calculated based upon a SSG I did for Genentech (DNA) in May of 07 when the market price was $ The ratio based upon my judgments is 8.4 and the illustration clearly shows that I have chosen a low price of $57 and a forecast high price of A HIGH PRICE -- NEXT 5 YEARS $ in the next five Avg. High P/E 36.0 (3D7 as adj.) B LOW PRICE -- NEXT 5 YEARS (a) Avg. Low P/E 25.0 years. The ratio itself is (3E7 as adj.) (b) Avg. Low Price of Last 5 Years = 37.8 (3B7) heavily influenced by the (c) Recent Severe Market Low Price = 43.9 = (d) Price Dividend Will Support Present Divd. chosen low price for the High Yield (H) Selected Estimate Low Price C ZONING zoning (buy, hold, sell) (4A1) (4B1) BI/NAIC looks for this (4C2) Lower 1/3 = (4B1) to (4C3) Middle 1/3 = to ratio to be at least 3 to 1 (4C4) Upper 1/3 = to and that means what? The D UP-SIDE DOWN-SIDE RATIO (Potential Gain vs. Risk of Loss) High Price (4A1) Minus Present Price ratio is meant to illustrate Present Price Minus Low Price (4B1) a risk/reward relationship. How much risk I must take versus how much reward I might get (if the price over the next five years were to actually get to $ in the SSG illustration above from the current price of $77.64 and until the current price rises to $105.4 (the start of the hold zone above), this illustration will always have an U/D ratio of more than 3 to 1. The stock price is therefore evaluated to be in the 2 Proj. P/E [26.75] Based on Next 4 qtr. EPS [2.85] 4 EVALUATING RISK and REWARD over the next 5 years Assuming one recession and one business boom every 5 years, calculations are made of how high and how low the stock might sell. The upside-downside ratio is the key to evaluating risk and reward X Estimate High Earnings/Share X Estimated Low Earnings/Share High Forecast Price Minus Low Forecast Price UEquals Range. 1/3 of Range = Present Market Price of is in the Buy Range = buy zone and will be considered a buy until the price appreciation reaches $105.4 when it enters the hold zone. The price appreciation in the hold zone will lower the U/D ratio from 3 to 1 to a ratio of 1 to 1 when the price is half way between the high price of $ and the low price of $57 which in this illustration is about $154. A price appreciation to the start of the sell zone of $202.2 will have an U/D ratio of about.35 to 1 and should be an attention getter to the owner of stock. The risk/reward is now clearly not in your favor. One bad Current P/E Based on Last 4 qtr. EPS [2.28] quarter or a change in the PEG=109 general economic climate = Forecast High Price $ (4A1) could have disastrous 2.01 = $ 57.0 results. Try the what ifs with = 0.0 this ratio and you ll see = $ 57.0 (4B1) how risk/reward changes. (C) (4CD) (Buy) Note: Ranges changed to 25%/50%/25% Be aware though that if (Maybe) (4A1) (Sell) you pick a low price for (4C5) zoning that is higher than = 8.4 To 1 the current price, the ratio (4D) will calculate out at This is because the ratio of risk/reward cannot be over 100% (all reward and no risk - where do I get one of these companies?). Likewise, if the ratio calculates out at more than about 10 to 1, you may want to reconsider the low price or the calculated high price. Anything that has that low of a downside risk is probably not realistic. Good hunting and may all your stocks double in less than five years!!!! Upside/Downside Ratio

3 NON -PROFIT VOLUNTEER BASED MEMBER DRIVEN 2007 BetterInvesting Education Fair Saturday ~ September 29, 2007, ~ 8:30 A.M. 3:30 P.M. Millennium Alaskan Hotel 4800 Spenard Road, Anchorage, Alaska Featured Speaker: Gary Ball Seminar presenter since 1991 at the BetterInvesting National Conventions; Featured in Smart Money, Consumers Digest and Fortune magazines. Guest Speaker: Joe Beedle Executive Vice President, Chief Lending Officer, Northrim Bank Educational presentations scheduled: How to Turn $100 into $1000 Finding Stock Information with Value Line Intro to the Online SSG Learning to Use Portfolio Manager Quick Analysis Tools for Stock Evaluation SSG (Stock Selection Guide) Bloopers Mutual Fund Basics When to Sell Beside Never! Cost of $50 includes lunch ($60 if postmarked after September 22 nd ). Questions to Anne Grosshans anneg@gci.net or call (907) Registration form available at: SPONSORED BY THE ALASKA CHAPTER OF

4 Alaska Chapter Newsletter You can download this form from the website Alaska Chapter 2006 BetterInvesting Education Fair Saturday, September 29, 2007, 8:30 am - 3:30 pm Millennium Alaskan Hotel 4800 Spenard Road, Anchorage, Alaska Registration Form Enclosed is $ for reservation(s) for the 2007 Alaska Chapter BetterInvesting Education Fair on Saturday, September 29, Cost, including lunch, is $50.00 ($60.00 if postmarked after September 22). No refunds or cancellations after September 15, The Alaska Chapter will be offering the following publications for purchase. Please indicate if you are interested in purchasing by writing the number of copies and total price on the lines provided. Include the price of the books with your registration fee. Postage will be paid by the Alaska Chapter of BetterInvesting. You may pick up your purchase at the Fair. BI Introduction to Successful Investing $15.00 No. of Copies Total BI Stock Selection Handbook $15.00 No. of Copies Total BI Mutual Fund Handbook $15.00 No. of Copies Total BI Investing For Life (Youth) Handbook $15.00 No. of Copies Total Using Portfolio Management Wisdom $15.00 No. of Copies Total Computerized Investing and the Internet $15.00 No. of Copies Total Investment Club Operations Handbook $15.00 No. of Copies Total Book Total $ Registration Fee $50.00 per person Registration Total $ Total Amount Enclosed $ Name Address City State Zip Club Name Address * Preregistration Deadline is September 22. After that date you may register at the door. Make checks payable to Alaska Chapter NAIC and mail to: Alaska Chapter NAIC Attn: Fair Reservations P. O. Box Anchorage, AK * Reservations will be confirmed by

5 Investment Resources at the Anchorage Loussac Library by Brian Stanfill, Alaska Chapter Board Member Anchorage Municipal Libraries offer resources we can all use to help us select and evaluate stocks and mutual funds. The stock investor who routinely evaluates stocks for an investment club or personal portfolio using methods or software developed by BetterInvesting is probably familiar with the Value Line Investment Survey and the individual Value Line reports. You can borrow the Value Line Investment Survey for in library use at the 3rd floor reference desk of the Loussac Library, as well as several branches. Eventually you will find a Value Line report on a stock that has interest to you. You then must copy the page from the book, hopefully getting a good copy and spending $0.15 per try. Here s a better way to get good quality Value Line reports. The book version of the Investment survey is great for reference, but when you find what you are looking for, or come to the library with your list of stocks here is how you can get good quality printed reports by using the online edition of Value Line. Chapter Directors ~ Contact Information President - Pat Hunt president@alaska.betterinvesting.net Vice-President - Tim Janneck vp@alaska.betterinvesting.net Secretary - Carolyn Long Treasurer - Joanie Risch treasurer@alaska.betterinvesting.net Club Relations - Roger Burnside rburnside@alaska.betterinvesting.net contact - Jeff Manfull jmanfull@alaska.betterinvesting.net Education Co-Chairs Anne Grosshans agrosshans@alaska.betterinvesting.net Dinah Abood Publicity - Marianne Kaemerer mkaemerer@alaska.betterinvesting.net Alaska Chapter Newsletter From any Municipal library catalog computer: Click on available, then type catalog when prompted for user name. Click use this computer ; click accept for library Internet user policy. Next click on databases, and then click on Value Line. In the quote / symbol look up box type a ticker symbol and hit enter. Click on the red.pfd file to open the Value Line stock report. To review more Value Lines click the back button at the top of the screen. Type in your next ticker symbol hit enter and repeat the process. From this point you can either save your report to a floppy disk or print it to a library printer for $.15 per page. To print your Value Line reports: Click the print icon on the toolbar and a print window will appear. Select the number of print copies you want at $.15 per page, and click OK. If the total for your print job is correct click the print button. Next enter your name to identify your print job and click OK. Click OK again and go find the printer. In the display adjacent to the printer select your print job and click. (If you have multiple print jobs, select them all). Deposit money in the amount shown in the window, click OK and your print job will begin. With practice this will get you good quality copies easily! While you are at the Loussac, have a look at the Investment Newsletters and Magazines list kept on the counter of the 3rd floor reference desk. With your library card (available at any Anchorage Municipal Library) you can also access Morningstar investment information from any computer connected to the internet (from inside the library or from home). Just visit: and click on Morningstar. Print copies of reports from Morningstar in a similar fashion to library printers, or from home with your own printer. The Loussac and branch libraries have a lot of information to assist you with your investment decisions. 5

6 FALL/WINTER 2007 ALASKA CHAPTER PO Box Anchorage AK NONPROFIT ORG. U.S. POSTAGE PAID ROYAL OAK, MI PERMIT NO. 312 IN THIS ISSUE: Presidents Message Education Fair Guest Speaker Library Resources Upside Downside Ratio Education Fair Information Volunteer with Your Alaska Chapter NON -PROFIT VOLUNTEER BASED MEMBER DRIVEN A Good Way to Improve your Investing Skills Are you or a fellow club member a good candidate for a Directors position on the Alaska Chapter board? Directors are expected to attend monthly Chapter meetings held the first Saturday of the month, take part in planning and assisting with SSG discussions, classes, and our Education Fair. Some of the benefits include: Monthly training at Chapter meetings Opportunity to learn new skills in publicity, public speaking, teaching, event organizing, and more. Getting to know and work with a great group of dedicated volunteers. Knowing that you are helping educate other willing investors. Complimentary subscription to S&P Stock Data Service and the Mutual Fund Education Center on the BetterInvesting.org website. Discounted registration for the BetterInvesting National Convention. Help for Your Club Treasurer Encourage your club treasurer to join the club treasurers support group. Club treasurers met again during our Club Officers Get Together to discuss how they maintain the financial structure of their clubs. We discussed the accounting programs the various club were currently using, and agreed to continue the chat group. The group is designed to assist treasurers by answering club accounting questions and helping solve accounting problems. If your club would like to be added to this informative group contact Joanie Risch at jrisch@acsalaska.net.