Tri-State Global Investment Club ©

Who We Are And What We Do

We are a bunch of guys and four women all interested in investing in common stock. We are all members of NAIC. Our club is just over two years old , Our officers consist of , President, Vice President, Treasurer , Assistant Treasurer and a Secretary, and an Audit committee,
We attent at least one NAIC sponsored investor Fair each year and one member has attended a national meeting of the computer group.,
There is usually no meeting in August when we have our Annual Family Picnic

We meet each month on the third Saturday of the month At "Moments Cafe'", located at 784 Elmont Rd., Elmont NY 11003
The telephone number is (516)285-0635

For Directions see map below Click on the map to find your way

to present stocks , to educate members and make decisions on purchasing of stocks. All members have a computer and use the Investor Toolkit software program, mainly for doing Stock selection and stock comparison. All members have a copy of the Investors Manual , or Starting and running a profitable investment club", and are encouraged to complete "the stock to study" and "the undervalued stock" presented in each month"s issue of Better Investing magazine.

Most members have access to the internet and are encouraged to visit NAIC home page at www.better-investing.org.Having an active e-mail account is a prerequisite for joining the club since minutes and agenda are sent out this way.

Our Portfolio

We have bought eighteen (18) stocks so far and sold one :

CMH clayton homes , manufactuers, provides financing and manages some manufactured home communities in the south east . Sales have been adversely affected recently by worry about possible rising interest rate , but the company has good management and sales and eps growth rate in the excess of 15% over the past 5 years.

SYK stryker corporation provides hospital equipment and medical devices ,e.g. equipment for arthroscopy. They have been growing at historical sales and eps growth rate of > 15 % annually .Most of our portfolio's appreciation has been due to this stock .

Ofice Depot viking office supply. soon to be acquired by office depot

HKT
Hong Kong's Market has been very volatile recently but we are confident about the fundamentals of this company which has no debt and is 60+ % owned by CWP. We think this stock is still undervalued based on 1997 pe ratio

CNC
We originally owned GNT until it was acquired be Conseco

COMS We own 50 shares of this Networking stock and hope the union with US Robotics is synergistic.

TOM We feel this men's apparel designer will do well it has excellent balance sheet and strong historical sales and eps growth rate.

ELY Calloway golf has suffered badly from the asian contagion and rules from PGA affecting metal woods.

Pride International Well run oil servicing company whose price has plummeted recently .Is this an opportunity to by more ? do your own SSG

HD Home depot , the gigantic home improvement wholesaler

Our Investment Philosophy

We believe in thoroughly researching a company before a purchase is made. We extensively use S&P report to complete our SSG mainly because it is easier to read than value line . We are aware of the fact that S&P reports information unadjusted, while Value line adjusts for one time charges ,etc. Below is a list of criteria we try to look at to make buy decision.

Criteria for picking Stocks

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• Historical sales growth should be > 15% for the past 5 years

• Historical eps growth rate should be > 15% for past 5 years

• We try not to project future eps growth rate greater than sales growth rate and certainly not above 20%

• We pay particular attention to management . Question to ask are how old are they ? How many shares do they have in the company and are they selling or buying shares. It is also important to ask how long they have been at the their post

• We next look at how management has been handling the money entrusted to them or their effectiveness. Specifically what is the trend of Pre-Tax profit margin and Return On Equity. Hopefully these numbers are all going up each year or are greater than 20%.
  We try to compare these figures with industry averages

• We also look at debt / equity ratio , a ratio less than 30% or better still no debt is our aim .

• We next look at PE ratios and its relation to the last 5 year average, we aim to buy at a PE that is not more than 25% of the last five year average.Now this is easier said than done , and even Warren Buffet at his recent " Woodstock of Capitalism "meeting in Omaha thinks that stocks are overvalued, ie PE ratios are too high. A better way to look at growth stocks is then to compare PE ratios with projected growth rate. A pe/projected growth rate of 110% or less is ideal

• We try to predict the future high price and future low price of the stock in 5 years time. This is done by the" toolkit " computer program , but there is considerable room to put your own jugement in.

  Now this is the most important aspect of assessing the future prospects of a company.
  This is where all the research comes in , we suggest members go to the company's web page or get the annual report .Annual reports or 10K reports can also be obtained on line at the SEC's web site at www.sec.gov

  The toolkit program creates three zones one for 'buy" , one for" hold ", and one for" sell"
  The program however is not a "black box" and there is considerabl room for Judgement

• The aim is to buy a stock at reasonable price or not overvalued.

Summary

• We aim to double the price of our stock in 5 years by picking stocks with "total return" of at least 15%

• We try not time the market and listen infrequently to economic data e.g. CPI, PPI & Interest rate If you have the time however you can check out the above links.

• We try to invest regularly or at least every quarter

• We re-invest all dividends.

• All our transactions are done through Waterhouse discount Brokers. All trades are done online through "web broker" and we have the added advantage of getting somewhat recent S&P reports.

• We have stayed away from DRIPS for our club because of the extra paper work and the time it takes to set up such an account. At least, for now this keeps everyone interested , since stocks are bought soon after each meeting.