Hi gang,
poor old me being the hapless treasurer of our club (in
operation for 4 years now) is getting hammered about poor
returns and with it, a sense of loss of faith in the unit
value system.

What happened, was the club started with a unit valuation of
$10, which quickly (in one year) rose to $20, and has sat
around this level ever since (its around $24 now).

I want to be able to explain that we doubled our money
fairly quickly, and that since then, capital invested has
had essentially a flat return.

What i'd like to do out of bivio is get a unit valuation
report over time that I can chart to show this..

anyone know how this could be done?

thanks in advance

Mike Taylor
treasurer of PORT club

Hi Mike,

At first glance, I thought your message was a joke. I had to re-read it to
make sure. The unit value system has nothing whatsoever to do with your
returns. Your members should be smart enough to know that.

Doubling your money in the first year of operation was more about luck of
the draw and less about your club's ability to pick stocks. The fact that
those stocks doubled over 4 years is more realistic. It simply says that
you chose the right stocks for long-term growth. The fact that that growth
came in the first year is indicative of the stock market, which never seems
to go up in a straight line.

You need to convey to your members that returns need to be reviewed over the
long-term. One thing about bivio that can be a double-edged sword is that
ongoing returns are based on every decision you've ever made--good and bad.

If you go to Accounting|Reports|Investment Performance, you can see your
return (at the bottom) for all stocks bought and sold. At the top of this
report, you can choose to see all stocks, or just the ones your club
currently owns. You can also change the date of the performance period.

Our club had a major member fallout in the spring of 2003. At the time, we
were paying members off in cash. That has since changed! We had to sell
several stocks at a substantial loss to payoff the members, and that loss is
still holding back our returns (since inception). Now, I prefer to use the
52 week review at our meetings. It's more realistic of what our club has
been doing.

 There isn't a single report that will show the history of your valuation
units. However, those of us who create annual club reports like to take the
valuation date and unit value to create an ongoing spreadsheet. That gets
converted into a graph that finds its way into our annual reports every
year. Those who are more talented than me will also plot the S&P 500 and
add that line to the chart as a comparison. I recommend that you try
something simple like that.

It's just plain silly to think that your club will garner a 100% return
every year, or that using unit based valuations have any effect on your
portfolio. Sounds like a little education about the accounting methods
could be very helpful to your members.

Investment clubs are not just about returns. They are also about education.
Good luck to you.

Lynn Ostrem, VP
garbagecop@earthlink.net
Crow River Investment Club
www.bivio.com/crowriver