AAII PHILADELPHIA CHAPTER - HISTORY PAGE

Rev to: Monday, January 31, 2000

Please note, HISTORY THREADS are being moved to individual pages for the Chapter, and our four SIGS (CI, MF, OPS, VI). A series of hyperlinks on the home page will enable quick access to them. Listings will be organized in a reverse order so that you may see the latest (historical) activities quickly. Please be patent during this transitional period. Thanks!

If you are a newcomer interested in what goes on at the many activities of the Philadelphia Chapter of the AAII and its many SIGS - or just a regular member who missed a meeting - this is the place for you. We peel off the meeting announcements of past events (but leaving at least one past event there) and update them to provide a summary of what happened at the event. A quick scan lets you find out what's been going on recently at local AAII activities. But it's no substitute for actually attending and participating. So get familiar with what's been going on, pick the activites that look interesting and plan to attend the next schduled event.

CHAPTER MEETINGS - HISTORY :

(*) APRIL 22, 1997 (Tu.): THE BIG PICTURE: with Mr. Delos Smith a Conference Board Analyst, made an enguaging speach outlining a challenging business environment as we transition to the next century. The new business paradyme will severely stress companies and their workers. These long term trends will greatly impact the companies you investing and the investment results they produce. But it will reward the young of spirit who can cope with the rapid changes in the global economy. In a long Q&A period, he outlined the problems facing Mr. Greenspan (who he knows well). He is essentially flying blind, as the traditional economic indicators the government uses are well adapted to measuring a 1950s style economy, not a year 2000 one. A great evening with a top speaker.

Pre meeting Special Feature: We toured the many Web sites where you can find the same economic data that frustrates Mr. Greenspan so much - plus many other data repository sites that signal the fundamental economic trends underlying the stock market.


SPECIAL EVENTS: During 1997, we've had now had three sold-out sessions of Mr. Fred Cohens Covered Options seminar. The May session entranced almost ninty attendees. Fred uses a conservative approach, selling call options on stocks he already holds as investments. The approach is designed to boost portfolio return. While it can cause you to miss gains from sharp run-ups, the objective is to garner a high annual percentage return on your investments rather than looking for the occasional big hit. He showed us techniques that allow you to do just that.

JUNE 24, 1997: PROFITING FROM THE INFORMATION SUPERHIGHWAY with Mr. David Wanetick gave us a comprehensive walking tour of the semiconductor, communications and other "high tech" industries leading us into the new "Internet" age. He named names and gave reasons for the firms he favors, and those he avoids. The entire area involves intense competition, often amoung powerful companies with differing technologies. While no-one can predict the future with certainity - especially when so much of our future telecommunications systems are politically as well as technology driven - Mr. Waneticks roadmap will help us as we search for opportunities. In addition to his formal presentation, he answered questions from the audience for more than an hour.

Pre-meeting Special Feature: Dr. Gene Rawdins much anticipated Mutual Funds, the Computer and the Internet" presentation, rescheduled from April, was presented. If you think that picking a Mutual Fund is a paper-centered activity, come and see how Gene does it faster and better. For the modern fund investor is a computer maven. On-line and computer based data bases let the fund investor to screen thousands of funds to find standout performers. Pick a segment fund, a closed-end fund or a type fund that offers a better return at a reduced risk.


  • SEPTEMBER 23, 1997: POINT AND FIGURE CHARTING: Thomas J Dorsey, of Dorsey-Wright Associates. Mr. Dorsey gave a captivating and informative talk on the Dorsey-Wright approach to Point and Figure charting. Using humor, good examples and interaction with the audience, he first taught a primer on Point and Figure charting, an almost century old approach to tracking the market. P&F is simple to do, even for the pencil and paper chartist. It can be done in minutes on a weekly basis, and is especially useful to the intermediate and long term investor. Yet, P+F also provides breakout timing for short term investors, too. It lets the fundamental investor implement an effective timing strategy.

    In the unified DWA systems approach, he explained, they use P+F techniques at the market, market sector and individual stock (and fund) levels, supplimented by fundamental analysis of the stocks targetted by the approach. He noted that this strategy was designed to recognize movement in stocks is, on the whole, heavily influenced by both market and market sector dynamics and only slightly by the stock itself. Basically, DWA follows all of the stocks in multiple stock sectors groups using a traditional P+F approach (3 block reversal, with block size set by the stocks price range). DWA then calculates the total number of stocks in BUY (or SELL) mode on their P+F charts and then calculates the sector and market BUY percentages. Trigger levels of 30% and 70% are used as threasholds for oversold and overbought conditions. For the market, they plot a scattergram of sector ratings - and then focus on desirable stocks in favorabilty positions sectors. While they will invest in individual stocks in less favorably positioned sectors, the use approapriate caution based on the sector/market positioning. Individual stocks are evaluated on a fundamental basis as well as by the current P+F structure signals. So this is truly a a systems level approach.

    After his sprightly talk, peppered with anadotal humor and catchword phrases (he surely has the Southerner's gift for exposition), Mr Dorsey generously showed and analyzed actual examples using his on-line service. In addition to pointing out some stocks DWA feels are advanteously positioned, he did the same for accepted stock (and fund) suggestions from an attentive audience. While DWA provides these and other proprietary services through printed and Internet services, most of what he demonstrated can be accomplished by the indiviudal investor. He offered a free trail subscription to the basic service to attendees.

    If you didn;'t make the meeting, you missed an enjoyable experience. But check Mr. Dorsey's popular book on P+F charting. (Note: In addition to a popularily priced Internet P+F service, DWA offers a variety of more expensive services to the professional market as well as money management services.)

    The premeeting Focus Presentation provided an overview of the newly updated AAII National Web Site (see Contacts page to Hyperlink there). The Overview highlighted may new and upgraded features, including the new discussion topics. In October, we'll focus on the downloadable software and templates available on the site.

  • OCTOBER 21, 1997: Kenneth Coleman, author of the Investment Tracker newsletter: "FOLLOWING THE BUSINESS CYCLE TO INCREASE PROFITS AND CUT LOSSES". Historically, the month of October has jump-started some of the stock market’s major downturns and this month seemed to be no exception. But Mr. Coleman spent most of his lecture and the following Q&A session on the effects of the European Monetary Union (EMU) on the US markets and dollar. He felt that the EMU block of nations will present serious competition to the US Dollar block. For years, the dollar, and the American markets have benefited as the currency haven for the world. This produced large capital inflows to support both our deficits and our markets. But soon, European powers will be exchanging their dollar reserves and holdings to set up their EURO accounts, rather than supporting the dollar as G-7 members have traditionally. With a single European currency for 350 million people, the dollar will have competition as an investment vehicle. Large dollar holdings by Asian countries may be effected - both by political factors and the investment option the EURO presents. In short, classic supply-demand factors will take effect. So far, Europe is not yet an organized, efficient economic engine - he characterized them as more where our Rust Belt was a few years ago. (p> So as they can make the EURO happen - watch out. Mr. Coleman was less than bullish on the future of American markets and the dollar. But he saw safe havens in several areas: hard assets (real estate), energy and minerals, the Swiss Frank and, of course, gold.

    Pre-meeting Focus Feature: Shareware. Is it for you? Don't want to lay out $400 for a commercial investment software product only to find it doesn't meet your needs. Try shareware first. Shareware lets you try, before you buy. And amazingly, the best shareware products offer quality, features and support comparable to the higher priced stuff. We scoped out a top program Fund Manager (a great portfolio management package found by our own Emil Teyssier), outlined some other top picks, learned what else there is and how to get it from the AAII National Web Site.


  • NOVEMBER 18, 1997: Gregory Weiss Editor of INVESTMENT QUALITY TRENDS Newsletter. “The Dividend Connection: How Dividends Create Value in the Stock Market” While investors cannot agree on a single approach to selecting stocks, the desirably of a disciplined, consistent stock selection framework is well accepted among successful investors. Mr. Weiss applies a relative dividend yield approach to a universe of blue-chip stocks to help determine purchase and sell values. Avalue investor with a focus on blue chips, he primarily looks toward the dividend yield (current annual dividend payment divided by share price) to identify when stocks are undervalued or overvalued. Over time, stocks repeatedly fluctuate between high and low values best indicated by dividend yield. If you believe the dangerous and popular nonsense that dividends are no longer important, you will receive a much-needed education at this meeting. Gregory Weiss will first explain his approach to investing that uses the key indicators of quality and value, including dividends. Next, he will point out important episodes in the history of the Dow Jones Industrial Average that might serve as a model for the future. Lastly, Mr. Weiss will discuss what he thinks of the current stock market in general, and where he finds good value today.

    Gregory Weiss is the editor and chief analyst for the Investment Quality Trends newsletter, and co-author, with Geraldine Weiss of The Dividend Connection: How Dividends Create Value in the Stock Market. An expert on blue chip stocks and the importance of dividends in determining stock market value, Mr. Weiss frequently is quoted in such national publications as Business Week, Money, Forbes, and Fortune. [If you missed the meeting, take a look at your March-April 97 issue of Computerized Investing to see some of Mr. Weiss's thoughts.]

    Focus Presentation: drip , Drip , DRIP..... A Dividend REinventment program is another DRIP that always seems to get bigger. Today, a lot of firms and even brokerages offer DRIPS as an easy way to start small and grow larger with a minimum of pain and complexity. We covered some of the most popular ways to do this and provided sources on the WEB to find out who "drips" and how to get started.


  • JANUARY 27,1998: Susan Mullin, North American Manager of Murry Johnstone International (Glasgow,Scotland), INTERNATIONAL INVESTING: "A Comprehensive Evaluation of the Merits of and Prospects for this Asset Class". Ms. Mullin demonstrated to us that a large part of investing success is due to where you invest, not in the specific stocks you invest in. Since the global market still is a crosscurrent of rising and falling economies, picking where to put your money internationally can greatly improve your investment results. She showed how correctly picking the place, not the industries, can beat a US based portfolio. And as we saw in her presentation and the Focus presentation, there are a variety of ways to do this. WEBS (ASE based "unmanaged funds" of the leading stocks in each of about twenty countries) trade like stocks, with daily pricing and activity. Yet they have amazingly low operating and trading expenses. And we covered other ways that a US investor can use; from International Mutual Funds to foreign and US based international companies traded on the NYSE.
    Focus Presentation: To help the global investor along, we reviewed how the Internet can provide you International investment information that was never before available to the average investors. With English the dominate Internet language, even places from Norway to Singapore prove English language versions as their primary or secondary version. So read the current edition of Business World, direct from Manila, get your quotes from a foreign exchange or visit a company Web page to learn about leading firms in 100 lands. If you really want to deal in the U.S. you have many choices to invest internationally. They range from Mutual Funds with a global perspective, to WEBS traded on the ASE and ADR/ADS shares traded on all of the NYSE and NASDAQ. So join the global economy with a firm knowledge base, thanks to the Internet.

    Pre-Program Focus: The Tax Man Cometh and with the new Schedule D and a few other "simplifications" to the tax law, so does trouble for a lot of us. We reviewed Turbo Tax and Tax Cut, the two most popular tax packages. For most of us, both packages arewell equipted to make 1998 tax filing almost pleasant. Both packages offer a basic and a deluxe version, so this may be a more difficult decision that which one to buy. The deluxe versions offer full IRA and supplimental documentation and videos, as opposed to the summaries in the basic programs. Turbo has a bit more sophistication (if you really need it) but Tax Cut has perhaps a more pleasant interface. And it seems to be offered at a lower price in many sales. But take your pick and save a lot of time and toil.
  • February 24, 1998: Millard (Jay) Jackson, Director Estate and Tax Planning, Janney Montgomery Scott, reviewed the many important changes in the tax law. He covered the benefits (and in some cases - lack of real benefits) that will appear on this years return as well as the "out-years". While there is new complexity in Schedule D (especially in 1998), there are Capital Gains Tax savings. Like many other tax breaks, the alternate minimum tax comes into play for many of us. As always, the government gives with one hand and takes back with the other. The Alternate Minimum Tax kicks in sooner than many of us would like. So when you get a tax benefit, you may discover that the AMT takes away some of your deductions - effectively eliminating the advantages of the capital gain tax cut. Again, there's good news with the new Roth IRAs - but only for some of us. And the actual benefit is unclear. The Roth lets you put in post-tax earnings, unlike the familiar IRA which is pre-tax money. Unlike the convention IRA, which gets taxed as you take out the earnings and principle, eventual withdrawls from the Roth are fully tax free (but not always at the state level). Further-more, while a conventional IRA gets taxed at draconian levels if it falls into your estate - the Roth does not. You can convert part/all of your conventiona IRA into a Roth, if you pay the taxes on the gains immediately. For 1998 (only) conversions, you can spread this byte over 4 years. But you must qualify with a low tax income. If you convert and are unqualified, you have effectively terminated your IRA. The penalities are enormous. So if you have any doubt - delay until you know exactly what your annual income will be. Since the new laws will let us all die rich (what with insurance, home values and investments), Uncle Sam has his eye on your estate. So Mr. Jackson finished up with a mini-tutorial on ways to save some of your estate from Uncle. He outlined several techniques (there are not a lot) including Gifting, Trusts, Mariatal Deductions and more. Again, there are pitfalls to trap the unwary. But with the road-map he gave us and the extensive Questions and Answer period that followed, we all are better equipted. We fought hard to get the money - and we now know that we'll have to fight more to keep some of it. Thanks, Mr. Jackson.

    Pre-Program Focus: The Tax Man Cometh and with the new Schedule D and a few other "simplifications" to the tax law, so does trouble for a lot of us. We reviewed Turbo Tax and Tax Cut, the two most popular tax packages. For most of us, both packages arewell equipted to make 1998 tax filing almost pleasant. Both packages offer a basic and a deluxe version, so this may be a more difficult decision that which one to buy. The deluxe versions offer full IRA and supplimental documentation and videos, as opposed to the summaries in the basic programs. Turbo has a bit more sophistication (if you really need it) but Tax Cut has perhaps a more pleasant interface. And it seems to be offered at a lower price in many sales. But take your pick and save a lot of time and toil.


    SPECIAL INTEREST GROUPS - HISTORY


    COMPUTERIZED INVESTING SIG:

    MARCH 22, 1997: Special Events included "$urfin the Net", Gene Rawdin on Inside Information on Timing the Market, CHART WARS visits Stochastics and more


    MAY 17, 1997: A host of interesting events kept things hopping 'til past 1 PM. Mr. Bryan Duffey, a local broker, was our main speaker. He provided a comprehensive introduction into the Dorsay method of Point and Figure charting. (Note: Mr Dorsey himself will be our September 1997 Chapter meeting speaker. In the old days BS (Before Computer) point a figure charting was the only way you could keep charts and your sanity. When PCs arrived, most of us lost track of P&F charting. But it remains as valid today as ever. So its following has increased - and with a computer it has becomes even easier. And the Dorsey system which combines fundamental analysis and tracking stocks in light of their group and overall market performance makes for a solid analytical system.

    Gene Rawdin continued his series on reading market trends. He showed how and why the market has the characteristics found in the last stages of an aging market cycle. So take two aspirines before you come in June. Gary Eichorst gave a performance followup on 32 stock Telescan screening of last month. He and Stuart Shapiro are planning a consortium to do even more. Stuart Shapiro continued Chart Wars. This months choice Ease of Movement (EMV) was shown to be a erratic performer - fine on some stocks, but wildly inaccurate on others. But Stuart pointed out that it has a limited value when confirming other indicators (Stochastics a leading example of this.) In short - yet another jam packed meeting that lasted well into the afternoon for many CIers.

    JUNE 21, 1997: An extended Internet $urf started the meeting. We featured the updated AAII National Website and its many features plus took a quick look at Net News (Usenet) forums. Gary Eichorst took us on an all to brief tour of the Telescan WebSite (www.wallstreetcity.com). Later we moved back to room 807 for more events and discussions. Our Chart Wars series focused on an introduction to "Reading Candlestick Patterns (part 1 of 2). As usual, hangers on got into a group of topical discussions that carried on well into the afternoon.

    JULY 19, 1997: Another meeting that didn't end on time. "$urfin" focused on the new FreeEdgar WebSite, which automatically extracts data from the SEC company data base into your computer spreadsheets and use of Hyperlink sites (such as Washingtons Capital Computer Users Group Investment SIGs, to find new Internet Investor resources). Brian Duffy returned in Part II of his series on Point and Figure charting. He got us ready for the September Chapter meeting (on the Dorsey-Wright P+F System), assessed the currently overextended markets prospects and found us a few prospects in a difficult market. Emil Teyssier held a large audience as he demoed portfolio manager "Fund Manager", an elegant Shareware program. (In September, Emil answer some open questions on additional FM features.) During a meeting that stretched to 2 PM, we answers a lot of questions, explored some new concepts - but we never got to finish the Candlesticks feature and scan AAIIs upgraded WebSite for interesting Shareware. So you can guess some fall events we plan.


    • SEPTEMBER 20, 1997: In September, Gary Eichorst and Stuart Shapiro introduced their Stock Challenge (SC) feature as a continuing event. To start off SC, we'll detailed Gary's spring/summer success with a model portfolio culled from candidates unearthed by Telescans Proscan search service. (Proscan is one of the tools that lets you find all stocks meeting a set of parameters you designate). Now, Gary and Stuart will pick portfolios from new screening lists and challenge themselves to "beat the market". We also quickly completed from early summer "Candlesticks"; investigating some multiday Candlestick formations. (Review your Candlestick handouts.) Brian Duffy dropped by and give us a few hints on Tom Dorsy's upcoming Chapter meeting presentation.

    OCTOBER 18, 1997: We $urfed to some favorite and new Investor Internet sites for the first hour - then moved on to our regular meeting spot and topics. Stuart Shapiro and Gary Eichorst filled us in on progress with stock challenge. Broker Bryan Duffy visited us to follow up on his previous Point and Figure presentations (and Tom Dorsey's presentation at the AAII Chapter Meeting). He showed us his latest, need I say chilling, view of near term market prospects and his projections for some well known and favorite stocks. And the after-meeting discussions went on long enough to get a special mention in the PACS magazine - they had to throw us out of the building, they did.

    NOVEMBER 15th, 1997: Something a little different this month - product demonstrations and the long term view of TA. Stu told us advantages he's learned about the new version of AAIIs Stock Investor and we'll started a demonstration of the basic and advanced featres of the latest version (6.5) of MetaStock for Windows. Here's a traditional program that keeps adding capabilities and has largely overcome limitations of its hidebound design. To show off the program, we'll build up to a study of advanced features in 1998. Don Lee showed tricks with indicators. And, as usual, we talked well into the afternoon about investing........

    DECEMBER 20, 1997: $urf was up again, as we visited some of the internet sites our members recommend plus a quick review of Barron's "Top 20" sites. Gary's broker friend Rich Hadden opened a two part series showing how he's used Telescan and a custom-built Excel spreadsheet to automate a lot of the drudge work managing a portfolio means. In the precess, he laid out a roadmap on how he screens for successful longer term investments. As an ex-fighter pilot, Rich combines an agressive streak with a demand for excellence. He screens up stocks that offer proven performance trends (but also includes some classy stocks recovering after a bad period). As he picks the best to invest in, he puts them on a "performance track". Which essentially translates to "Up or Out". So we learned good techniques, discipline and got a few tips to check into.

    JANUARY 17, 1998: Broker Rich Hadden was back with the second installment of his TeleScan/Excel study. A broker, as any investor, never has enough time to investigate new prospects. Rich showed us how he (and you, too) can automate portfolio tracking and management functions. It leaves him a lot more time for real research. Plus nothing slips through the cracks, as it automatically alerts him to changes in his portfolio that demand attention. Interestingly, Rich's disciplined approach leaves little space for underperforming investments. He's wired his approach into the Excel spreadsheet. The spreadsheet also triggers an alarm when a stock starts to underperform - elimination from the portfolio follows soon. Hardheaded, but that surely stops a fault we all have. That is, holding on too long, hoping for a recovery. As he says "To make money, you must not lose money". Good advise - and a great presentation with more than a few "stocks to watch", included.

    FEBRUARY 28, 1998: After the PACS Turbo Tax presentation at the 9AM main meeting, we started our bi-monthly $urf. We visited both tax related and "Asian crisis" focused sites including the AMEX WEBS site, and several other internationally oriented sites, as far away as Manila. Later, in the regular meeting room, we compared Turbo Tax and Tax Cut. A short Q/A session on Taxes and Tax packages finished this section.

    We continued exploring TA Software features using MetaStock for Windows 6.5, prepairing for development and testing of actual systems in following months.. This weeks demonstration show how simple it was to develop custom indicators. Emphasis was on ;modification of adapting indicators from sources such as Equis and TASC.

    Stu Shapiro finished the meeting with a bang-up presentation how he uses Stock Screening. As you know, Stuart is using the AAII Stock Investor as a screening tool. His screening algorithm was inspired by an article in an AAII publication which showed Price-to-Sales ratio has proven to be the best single parameter in stock picking over many years. Although AAII shows a screen by O'Shaunessy to do this, you can bet that Stuart uses his own customized, backtested tool. It's one that has been profiled to fit his active investment strategy. Stuart showed us a current list of candidates he'd developed from this tool. [He noted that he's discovered that even for his shorter term trading, the data distribution delay of the AAII SI still gives time for a lot of opportunistic picking. Naturally, faster data availability can only improve the situation.]

    His latest scan showed nearly 40 candidates. He gave us the list (see CI Topics for the list). Not all of these stocks represent good current candidates - and some may never. Clearly some have already moved, some show no current signs, but there are, as always, a few stock chart formations that look promising. As usual, Stu showed us charts on both some current favorites plus a few "unfavorites" and past triumphs. (Say, If you'd been at the meeting, you'd know what they were). As Stuart pointed out, the 40 candidates and even the best positioned half dozen picks he found don't constitute an endorsement. You have to study and follow-up before you decide on your own trades. He noted that he's tailored this system to get maximal results with a minimum investment of valuable time. He makes only periodic screens, does one in-depth strategy review each week-end to develop his buy/sell strategy positioning and spends just a few minutes each day tracking results. Traditionally, he places 1-week duration buy orders at a fixed price (they automatically expire if no buy is made within five market days). As soon as he gets his stock, he places a sell order at the profit potential price he's picked for each stock. Except for the daily peak to see if there have been any surprises, the system runs on "auto-pilot" otherwise.

    So thanks to Stu for yet another of his patented easy-lessons in trading.

    MARCH 28, 1998: We managed to have some much to do that we never got to the planned MetaStock systems presentation (see April below). Sheldon filled us in on what the pros were recommending at the recent Florida Money Show. We came away with a giant list for further research - some of the pros even recommended the same stocks and strategies. Hal brought us up to date on how his fall list has done - and added a new Telescan winnowing for the spring semester. Stuart did a "mini-Technical Analysis" on some of Sheldons authorities top picks. Not only did we learn what still looks promising, but more of Stu's patented visualization techniques.

  • *** SATURDAY JULY 18th: AAIIs July National Convention gave attendees a chance to hear some interesting speakers. Those CIers who attended each picked one session to highlight (and we'll do more in September). We also got a chance to look at Trade Station, a high end real time TA package whose features have won it a loyal following amoung market professionals. We also looked in detail at implementing some screening packages containing both Fundamental and Technical Analysis in the same package using new QP2 and traditonal MetaStock. Plus we reviewed the Discount Broker situation and other investment questions of interest.

  • *** SATURDAY JUNE 20th: We had an interesting mix of topics this month. Chapter Prexy Sheldon Kerzner gave a review of the recent Chicago Money Show. As usual, the Guru's there had a lot of recommendations on potential stock investments and Sheldon gave us a complete summary of the stocks and their stories. The pencils were flying and members are even now researching those suggestions for possible buys. Sheldon also commented on the continuing Asian crisis, using information obtained from family contacts living in Japan. And the news for Japan is not bright. Information on their economic woes appearing in our newspapers certainly does not exagerate the scope of their difficulties and their governmental inability to act to solve those problems. Stuart Shapiro added to the list of investment candidates with his latest "look at" list derived from his AAII Stock Investor scans. Like Stuart, short term traders won't be buying the full list (almost 40 stocks) but focusing their research on the best positioned half dozen or so during the next month or so. Stuart also conducted a tutorial on how he uses his system and answered a lot of member questions. We also had a short demo and presentation on some of the more interesting features of the newly released (non-BETA) version of Quotes Plus 2. QP2 is notable for its combination of Fundamental and Technical data and its powerful Screening Language and data export and reporting facilities. It's a wonderful learning tool as well. Build-in help and an active user forum on Silicon Investor make this sophisticated program a top investor tool, as well as an economic source of market fundamental and technial data.


  • *** SATURDAY MAY 16th: At the main PACS meeting, Broker Rick Hadden and Stuart Shariro wowed the audience with the specialities - good presentations of two thoughtful investment techniques. Rich managed to cram into 20 minutes, details of his Telescan based approach and show how he uses Excel to automatie portfolio management and tracking. He even offered attendees copies of his Excel automation templates. Stuart followed up with a contemporary view of the market, using his patented visual analysis tools. As we all know, his ability to read the charts makes the complex seem simple - but everyone can agree both presentations managed that to an audience of mixed investment experience and background. We also provided members with a checklist of top Internet sights and the largely free investing tools found on the Web.

    At the CI 10 AM, Rich continued on with a spellbinding analysis of current market conditions. Using selected graphs he painted a vivid picture of current market conditions. While the market may continue on for a while, reading the fundamental (and technical) indicators indicates that risk of a market break it high. This becomes especially true with current high prices, if the earnings begin to disappoint. For there are two elements driving the P/E ratio. And falling earnings won't support such high prices with the P/E ration already so high. So Rich shares both scenarios and defensive tactics with us. Stuart presented a similar opinion, based on his Technical Analysis of leading market indicators that he has developed. He now has pulled in his horizons, both duration and profit percent goals to make money is a less ebulant market. Not purely a picture of gloom, but more a warning of the need to become more defensive. Taking a few bucks off the table is prudent - and puts you in a position to buy with better values appear. To finish off the meeting, we continued with elements of our screening tools study, including a demonstration of the Beta version of Quotes Plus 2.

  • *** SATURDAY APRIL 18th: We got off to a late start - had to retrieve a forgotten projection system - but once we did, we cooked. Sheldon Kerzner brought us Bloombergs site (www.bloomberg.com). This site is largely free and the rest is free with a $20 subscription to Bloombergs great new magazine. Its a great Omnibus site, with more types of information than most investors would want. We barely scratched the surface of its many features. Even though we lingered, we had extra time to scan several other competitive Omnibus sites. [In future months, expect more of these in-depth $urf's.] Following, we continued with our series on designing your own Technical Analysis System. Using MetaStock for Windows 6.5, we showed the construction of several complex scanning formulae. While we used MSW, most of the popular T.A. programs allow you to build similar complex systems, test their performance and then scan your data base of stocks to find more candidates.

    MUTUAL FUND SIG

    To be Provided from inputs from SIG members

    VALUE INVESTORS SIG:

    Value Investors SIG traditionally analyzes two-three stocks at each meeting, plus an occasional special feature or general discussion. The table below, tabulates stocks recently reviewed. Short discussions of particular analysis may be added later.

    MAY 20, 1997: One stock and a special topic this month. Safeguard Scientific (SFE): A splendid analysis of local firm, Safeguard Scientific. SFE runs a sort of incubator for small high tech firms to the great profit of its shareholders. (Only ThermoElectron seems to employ a similar approach.) Once, the fledglings show their mettle, SFE spins off a large rights offering to its shareholders, historically creating wealth for all. But can the keep this proven approach going?

    Power for the 21st Century, a Special Topic: You've seen the TV ads by Alleghany Power touting the day soon when Philadelphians will select a power provider and have PECO bring them the watts. This untried separation of generation and distribution seeming parallels deregulation in the telecom industry - yet brings enormous risk to the players. Will PECO, PSEG and other high cost providers (read nuclear) fail to manage the transition. Who will be the winners? The losers? If the words "Wheeling", "IPP" and "Stranded Costs" didn't mean much to you before, you know now. So look at the low cost generators, and secondary firms (suppliers, IPPs and national energy marketeers) for the most action. But follow carefully the political and regulatory action in each state and at the Federal Power Commission. How they legislate and rule will have an enormous impact as todays firms try to merge, split and reconfigure to avoid the perils of competition, stranded costs and the unknown.


    JUNE 21, 1997: Is there money to be made off investors - you bet. We looked at Value Line (VALU) and Schwab (SCH) as possible stocks to do it. Then we go continental as we look a two European Closed End funds, selling at a discount: Central Europe Fund (CEE) and New Germany (GF).

    JULY 15, 1997: We finished up the discussion on CEE and GF from June and covered Viacom Class B (VIAB). CUC International was carried over until next month. As usual, members do some homework and came prepared to participate in the discussion and also to propose August stock candidates.

    AUGUST 19, 1997: We covered CUC International (CUC), (a carry over from July and soon to acquire HFS) plus Perceptron (PRCP) a re-look from several years ago. CU stands out as a play on the use of its massive data bases on American households, integration of telephone selling with the soon to be acquired HFS travel and lodging services and its integrated approach to this future market. PRCP is a leader in vision systems for the automotive (and now other industries). Their niche, in large part manipulation and placement, offers significant labor savings as well as quality enhancements - and they are now expanding their focus outside the cyclical automotive industry. Several members outlines their favorite information sources - ranging from newspapers, to magazines to newsletters. OurThe Western Mainline team showed their starting list of 12 value candidates and targetted one. The Internet team couldn't find a good value selection. So we voted between Amgen (AMGN) and Montbatton (MTBN) as a second choice.

    Take a look at the 12 stock handout from the Western Mainline team. As we agreed, there are too many interesting stocks on that list to cast it away. Unless they bolt upward soon, you can expect that group to pick some more stocks from the list in future months. They will age off bad picks and refresh the list with new choices, too.

    SEPTEMBER 16, 1997: We reviewed Johnson Controls (JCI) (now largely an automotive industry supplier) and Amgen (one profitable biotech company) Both companies are leaders in their respective industries. But with leadership comes risk. JCI has made a striking transition from a building-environment management specialist. Today, it is also a dominate worldwide automotive interior systems turnkey supplier. They've maintained their reputation for superior quality and dependability. But supplier consolitdation in the automotive industry allows the auto firms to squeeze its vendors! AMGN was early to the profit point in their industry with a few blockbuster winners. But patents on the most popular products with expire early in the next century - and the pipeline looks thin. And there is the competition, together with the risk that competitors may launch their own blockbusters right at AMGNs key profit center products.

    *** OCTOBER 28th (Tu.): We covered two stocks: local unknown Philidelphia Consolidated (PHLY), an August pick by our Western Stock Group, and Thermomedics (TMD), yet another "Thermo-Electron spinout company" , a pick by our Internet Stock Group. PHLY is a high growth speciality insurer. The firm has successfully picked niche markets with high profitability (for example, insuring the inventory of new car dealers). Importantly, PHLY is lead and controlled by the founding family which holds a majority interest. TMD is another topical spinout from ThermoElectron. They specialize in several high tech areas, including: bomb detection (EGIS), precision measurement for manufacturing and speciality plastics. But like many TE spinouts, technical prowess has not yet been matched by outstanding market performance.

    NOVEMBER 25, 1997: A VI SIG SPECIAL EVENT. Berwind Asset Management LP professional money managers Marvin Klein and Richard Buchman presented their approach to Value Investing. We found out how these professionals use traditional Graham and Dodd techniques to manage $40M+ in private investment accounts.

    DECEMBER 20, 1997: A bit of retrospection and one stock wrapped up a prosperout market year for many of up. We had an informal roundtable on how our members feel about the market (after the recent turmoil) and their perspective for the new year. But to keep our hand in, we'll also coverdd one stock, Lubrizol (LZ), a key player in the international lubricant additive business. While LZ looks like a stock with a good future, our concensus was that it was ahead of itself - and better a buy in the low 30s that where it was. Like a good stock, LZ did just that, dropping below 33 before beginning a recent recovery.

    JANUARY 20, 1998: Time to got digital, or at least into computers. We analyzed ORACLE (ORCL) the perennial DataBase wallflower and hard disk co-leader Western Digital (WDC). For contrast, we reviewed Mid-America Apartments (MAA). Both computer industry giants have faced troubled times and the booming industry. ORCL has a history of promising much and delivering less. Today, the market for basic data base products is reaching saturation - and competition is tough. Industry legend and CEO Larry Eliason has pulled the rabbit out of the hat before - and just might be able to do it again. So perhaps it's a buy near $20. With disk drive prices plummeting (5 GB for $200 retail in February) and termoil in Asia, both Seagate and WDC have lost a lot of the luster they once had. Holders of WDC have seen 2/3s of the value of their stock vanish faster than you can boot some computers. Yet the need for more and more disk capacity says that there is a market. So is beaten up WDC got a future in your recovery portfolio? MAA is a little known, but well managed REIT. As REITS must pay out most of their income to retain their tax advantage, growing a REIT is hard to do. Yet, MAAs fine management has done a good job, while delivering high income to their holders. Consolidation and acquisition are to be expected in the REIT industry, and MAA should be well postioned to take advantage of abundant opportunities.

    FEBRUARY 17, 1998: Soon - Time for a round - table discussion on how to pick stocks for future VI meetings. We'll be working in smaller groups soon to fashion a more workable screening system for future meetings. Meanwhile Genesys Health Venture (GHV), a regional powerhouse in nursing homes, was worked over by the assembled crowd. GHV has grown rapidly, using acquisition and exploitation of opportunities in market extension. Today, the company is highly leveraged and involved in some complex real estate funding deals that may represent a new way of doing business or a future risk.

  • *** Tuesday AUGUST 18, 1998: VI SIG devoted most of its August meeting to discussing the format by which we select and study stocks. In a group vote, it was decided to drop the summer experiment (involving a three month cycle of industry selection, stock targetting and then actual stock selection. A committee was appointed to study how to implement a new system that would be more timely and responsive.

    In addition, we reviewed EVI (the company resulting from the spring merger of EVI and Weatherford-Enterra - and soon to be renamed Weatherford Enterra). EVI is the fourth largest oilfield service supply firm: providing virtually all of the hardware and many of the services needed to drill, bring into production and support ongoing operations at a site anywhere in the world. While EVI does not supply the actual drilling bits, they supply most of what does goes down the hole - from pipe to instrumentation. In the last year, EVIs price has collapled from the high 70s to the mid teens. Earnings are still good, but management has predicted a shortfall from predictions in the final 2 quarters of 1998. Our conclusion: EVI should be a winner, IF the industry stages a recovery. During early September, EVI has suddenly taken off - adding almost 50% from its recent highs.

    We discussed where value really may lie. Tobacco is a downtrodded industry involved in our domestic legal battles. Many companies may be destroyed by their legal liabilities. Yet worldwide, people smoke on. And many firms have considerable value outside their core tobacco holdings. With the right strategy, firms may manage to survive. We selected tobacco as our September target and will review BAT and allied IMASCO, plus ever popular RJR (RN)

  • Tuesday JULY 21, 1998: VI SIG continues with its summer experiment. The Stock picks of the Month ( Life Insurance Stocks AFLAC (AFL) and SunAmerica(SUN) will be reviewed. As we all know, the Life Insurance industry differs considerabily from the rest of the Insurance Industry. Due to strict reserve requirements for state governments, Life Insurance companies are strictly limited in how they can invest their reserves. Unlike other insurance companies where investment finess can greatly effect results, Life Insurance firms excell when their marketing, advertizing and cost containment strategies are well implemented. AFLAC ;does it by its unusual success in selling special insurance policies, primarily in Japan (where Cancer Insurance is especially popular). SunAmerica also is a study in creative marketing of specialized policies - using techniques that sometimes are strongly critized by outsiders. Plus, we'll have an overall status summary of the Energy Industry, prepairatory to picking several stocks for our August meeting. As you know, the Asian downturn and OPEC "cheating" have driven energy prices lower than we've seen for years. While prices at the pump are not falling as fast as crude quotes (a chance to make quick profits), price collapses have historically been profit killers for much of the industry. Will this be repeated this time and where are the opportunities created? Additionally, we picked EVI as the August Stock.

    Note that the VI SIG is planning a special dedicated session early in the fall. Our theme will be "Picking up the Pieces in Asia" - are their opportunities for the small investor to buy temporarily down and out stocks from the creme of Asian firms?


  • ***JUNE 16, 1998 (TU.): Meeting Tonight as usual. Telecom Industry Stocks for the evening are Corning (GLW) and Century Telephone (CTL). Plus we'll be picking both the stocks for presentation in July (Life Insurance Industry) and the Industry Category for August. Tonites presentations and discussion will include both the two stocks and the July Industry selection. Come and be prepaired for interactive discussion. See you there. Also see below for details of the new phased VI stock picking cycle.
    • *** MAY 26, 1998 (TU.) (NOTE: 1 Week later, due to conflict with early Chapter Meeting Date): See April outline for the new VI SIG plan. In MAY, here's what we'll cover:

    FOR MAY, STEP 1: Pick Industry Segment for June-July Industry Overview and Stock Study

    FOR MAY, STEP 2: Overview the Telecommunications Industry, Pick Stocks for June Study

    FOR MAY, STEP 3: Study Catalyst Stocks picked in Aprils' Industry Review:

    Englehard (EC)

    Johnson Matthey (London Stock Exchange)

    A third stock pick (Hardy-Handleman) is no longer traded. A third stock may be reported on.

    Don't be left behind. Come prepaired each month to participate appropriately in all three steps of the new VI Cycle.
    *** APRIL 19, 1998 (TU.): It's as easy as A-B-C! At least that's what our Roundtable hopes the new VI SIG meeting format will be. For the next four months, VI will shakedown test this new format. It's a top down approach, spreading discussion of each industry group and then its stocks. It's interleaved, using a three month cycle. This will allow members to focus on both an industry and its stocks. During this summers' trial period, we'll try it, improve it and then vote on whether to use this format permanently.

    Here's how it works. Each VI meeting will have three phased sections, each from a different step in the three cycle phases. Here are the three steps, which will occur progressively over a three month cycle for each industry targetted. Note how we will actually be in different steps in the cycle for three industry groups at each meeting:

    * STEP 1: In the first month (5-10 minutes), we'll nominate one industry as our target for progressive steps in the following 2 months.

    * STEP 2: In the second month (10-15 minutes), we'll profile that industry, selected in the previous month. Part of this overview proposes attractive stock candidates in that industry. At the end of this overview, members will vote to pick 2-3 promising stocks from that industry to study in detail during the following months meeting.)

    * STEP 3: In the third month, we'll study in detail the two or three stocks picked from the industry profiled in the previous month. We'll use the traditional VI evaluation format, with one member leading the analysis and all members expected to contribute.

    Thus, just like A-B-C, during any one months meeting you'll participate in one step from each of three offset industry cycles:

    * Industry A, STEP 3, study 2-3 stocks selected during the previous months industry review from the industry segment selected two months prior,

    * Industry B, STEP 2, overview the industry segment targetted in the previous month, pick several stocks from that industry for study at the next monthly meeting

    * Industry C, STEP 1: select the industry segment for the following months overview and stock studies 2 months hence.

    To help us diversify industry segments, we'll use the Index to The Value Line for industry segment candidates. All the industry segments Value Line will cover in the target monthly period will be candidates for a STEP 1 selection in each month. For flexibility, members may alternatively nominate a more timely or better positioned sector. After a short discussion, members will vote to pick the industry segment to profile in the following months meeting. During the STEP 2 industry overview in the second month, members will nominate interesting stocks in that industry segment. Again, attendees will discuss and vote on the STEP 3 stocks to study during the third months meeting. So we don't get locked out of reviewing other timely stocks our members unearth, one stock may be nominated and elected from another industry. But again, the members vote will decide on the stocks to study for the next month.

    If you check the chart below, you can not only see how this works, but preview how the next few months meetings will go.

    The advantage of this approach is a framework that develops our understanding of both an industry and its leading firms. With this phased approach focusing on stocks in one industry group per month, each presenter will not have to introduce and explain a different industry - that task will have been done in the preceding month. This will create time for the other two STEPS in each months meeting.

    It does mean that members should do their homework prior to each meeting, even if they aren't presenting. First, quickly review the industry segment candidates for the month and be ready to advocate your selection. Second, learn a little about the current months industry segement, so you can contribute to the discussion - and be able to nominate a well positioned stock you've found. Third, bone up on the stocks for the month. Bring along some information or recommendations on those stocks. Best of all, be prepaired to gain real understanding of what is going on a the best positioned industry groups and stocks.

    At each monthly meeting, one member will lead STEP 1, the industry segment selection, another the STEP 2 segment discussion and others, each of the STEP 3 stock studies for that month. But that does not mean you should be prepared to sit back and only listen. Your information, perspective and knowledge will play an important part in making the new approach viable and invaluable to us all. As we test this new approach during the summer months, we'll work out the kinks and refine it.

    The table below reflects the month-by-month subjects in each Step. It will be updated each month to show the progression of steps and target industries and stocks.

    VI SEGMENT / STEP TABLE, AN EXAMPLE
    STEP vs. MONTHMARCHAPRILMAYJUNE
    1.) PICK INDUSTRYCATALYSTSTELECOMT.B.DT.B.D.
    2.) REVIEW IND-PICK STOCKSNACATALYSTSTELECOMT.B.D
    3.) STOCK REPORTSNANACATALYSISTELECOM

  • MARCH 16, 1998 (TU.): It's back to traditional value type stocks big time. We'll covered firms and prospedcs in the down and out mining industy including ASARCO (delayed from February). For contrast different, we also looked at a little known, but prospering, local specality software & services firm, Systems Computer Technology (SCTC), a powerhouse in the education software market and an up-and-comer in several others.
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