club_cafe: New member valuations
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club_cafe: New member valuations I would not even join unless you could be assured of getting an 'honest' valuation. I would suggest getting the club into Bivio, and then trying to reenter previous transactions to get better clarity. the method used below in determining a member's valuation isn't even close to reality. Good Luck!! JM -----Original Message----- From: John Clemens [mailto:johnc6955@bivio.com] Sent: Monday, March 15, 2004 4:14 PM To: club_cafe@bivio.com Subject: club_cafe: New member valuations I have rejoined an investment club that I previously part of (hence "rejoined"). Anyways, we previously used Club Accounting software that used the NAIC valuation method. Since that time, the club has drindled to 5 members (now 6). They now use a simple Excel spreadsheet that takes that amount contributed divided by the total contributed to get ownership percentages (Mine at 13.23%). However, they keep track of their total loss (about 20%) over they life of the club. So, by joining I already have realized a $473 loss because I share in the losses. My contention is that my loss/gain begans when I join. If the club was up %100, would my $2300 become $4600? (I realize it is paper). I could then simply hold for the year (If that is the commitment, but I don't even think their bylaws have that), and cash out with a great profit. How should my valuation be calculated. I realize their method is flawed and I hope to change it, but how do I fix it in the meantime? Also, I joined by simply switching my shares that they previously had in the club but switched to me as my payout in 2001. I already incurred losses on these shares because of the market, joining would be a double loss. Help John |
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