Brief History of Bridging The Gap Investment Club
Two years before the inception of Bridging the Gap Investment Club, eight of the founding members have been presenters at Career Day Workshop organized by the Council of Black Engineers Association, a professional organization for the promotion of engineering as a career choice for minority students. Among the presenters were chemists, biologists, computer scientist and electrical engineers. The working relation among these professionals was quite excellent.
In September 1994, Benjamin Andoh, Lee King and Calvin Baugh, all co-presenters, began exploring ways of preserving this synergy and further harnessing all our individual talents into establishing a business enterprise in the future. The idea of forming an investment club was born out of this effort.
The idea of forming an investment club was introduced to other co-presenters and was well received. However, none but Sylvia Zachary, then the president of the Council of Black Engineers Association knew how to form one. She suggested we contact NAIC (National Association of Investment Club) for guidance. We wrote to NAIC and received a package on how to start an investment club to get us started.
In December 1994, we held our first meeting at Sylvia Zachary's houses to put together the framework of the club: the name for the club, the club's bylaws, partnership agreement and monthly contribution amount. However, it took us the next three months to resolve these issues.
Nine individuals were present at this meting. It was agreed upon by consensus that we each state, for the record, why we wanted to belong to this investment club. The following is a sample of the reasons members gave for belonging to the club:
The investment club officially began on March 5, 1995 with nine members. By January 1996, our membership had grown to thirteen. Bridging the Gap Investment Club was suggested by Calvin Baugh as our club's name and was accepted by the other members. Each member contributed $400.00 as seed money, and we all agreed on $40.00 as our monthly contribution. However, on our April 20, 1996 meeting, we changed our monthly dues to $50.00 by consensus.
The club's portfolio performance during the first year was dismal. We had the misfortune of investing in some technology stock: Cirrus Logic, Cypress Semiconductor and Ultratech stepper, at the very period the sector was experiencing an oversupply of DRAM and other memory chips. This resulted in the loss of 4% of our portfolio value. Also contributing to this lose is our investment in a couple of speculative stocks; namely, Galaxy Foods and Xsys Technology.
Membership interest started to wane after the first year, partly due to our disappointing first year. To reinvigorate our interest, the club started a stock picking contest. Each member was giving $5000.00 token cash to invest. At the end of six months the member with the most gain was declared the winner. As a reward, the club paid next monthly dues for the winner.
We also changed our investment philosophy to investing in stable and quality companies, with the introduction of the Fabulous five Dow theory conceived by Tracy Lipscomb. The essential element of this theory is that we select the poorest performing Dow stocks of the preceding year, and invest in five of those poised to turn around. The success of this strategy was reflected in 12% gain in the club's second year portfolio performance.
During the past three years, three of the club members have moved out of State. This has made it difficult for these members to participate in our meeting fully. To give all members equal participation, on September 1998, the club setup a website with facility for discussion.
We hope for a brighter future in the coming years.
Ben O. Andoh