Chapter 3

A heavy downpour cancelled playing golf that day but it gave Tom time to prepare for the investing class. He made an outline of points he wanted to cover. The no golf also gave him time to do some food shopping.

When he went to the investing class later in the week and walked into the dining room for lunch, besides the ladies he saw two men sitting with them at an expanded table. Linda introduced Tom to the two husbands who had decided to accompany their wives to the class. They were Mel Simmons and Bruce Shiner.

Mel said, “I hope you don’t mind me being here today. When Lana came home and asked to see our latest brokerage statement it kind of surprised me. Then when she told me my investment allocation was all wrong I thought I should come here and see what is going on. Like I said I hope you don’t mind me being here.”

Bruce looked at Tom and rolling his eyes pointed his fingers at his wife Nancy and said, “Ditto for me.”

In giving the class this week Tom did a quick summary on investment allocation covered last week then asked the ladies what their review of the brokerage statements showed. The responses varied from too few stocks to too many stocks, from too much money invested in one individual stock to not enough invested in foreign stocks. The husbands who had monies coming in from social security or pensions had not included phantom income in doing their investment allocation.

Tom thanked them for their doing the homework and then launched into individual stock selection. He covered a successful mutual fund manager’s advice about looking at cars in the parking lot or people waiting to get into a store suggestions on how to select stocks. He countered that with the efficient market hypothesis and the conflicting opinions on that hypothesis from other respected investors and behavior economists.

The benefit of investing in mutual funds or ETF’s which gave diversification because of the number of stocks in those funds was covered. The standard of comparing investment results to the S and P performance was discussed. He mentioned that an investor needs to balance the safety and performance of a mutual fund against the performance of individual stocks. Tom emphasized that he thought a proper balance cam be rewarding.

After a rest break he explained how he selects individual conservative stocks by looking at their five year financial report and what things he looks for.

Tom said, “I can’t guarantee you will get rich by investing this way which is very conservative but it has worked out for me. It is my impression that if a company has increased; sales, net income, and dividends as well as a few other things every year over the past five years and maybe longer, the probability is that they will do this again next year and its share price will go up.”

“Remember that the S and P is made up of five hundred large capital stocks. Since it is an average, the individual stocks composing it will either exceed or perform below that benchmark. If you can pick the stocks that exceed the average, you will be a successful investor.”

He concluded his presentation by saying he would cover stock mutual funds and etf’s next week and if time permits start to get into income investments. Their homework assignment would be to look at the individual stocks in their brokerage accounts and make a judgment if it is a stock you would want to buy or continue to hold by looking at the stock’s five year annual financial report.

After the class they ladies thanked him and said they again had learned something. The two husbands shook Tom’s hand and echoed their wives’ comments. The husbands said they would be back next week.

Linda thanked him for doing this training and said she wanted to reward Tom for doing it.

She said, “Our club here has its annual dinner dance this Saturday. Ray and I have purchased a table and we would like you and a lady friend to be our guest. It is a dress up affair and while the men don’t wear tuxedoes some of the ladies do wear evening gowns. Will you come and if you don’t have someone to bring I am sure I could find someone for you to escort.”

“Thanks for the invite and your tempting offer. Yes, I will come and I do have someone to bring.”

Driving away from the club he thought that Carrie would enjoy coming to this affair. He knew he had been thinking about doing something a little different than just taking her out to dinner and this just fit the bill.

Another thing he also thought about was the class he had just given. It seemed to him that he was getting looks from the red-headed Rachel Gamble, Doctor Bill Gamble’s wife. These looks she was giving him seemed to be more than just student-teacher. To Tom it seemed that she was constantly staring at his crouch. Sometimes the way she sat with her legs partially open he caught a flash of her white panties. Maybe he was imagining things and he just wasn’t sure if he was. He did know that he considered her to be one of the thoroughbreds as she had a nice figure and was facially very attractive. Her red hair and bedroom eyes made her look very sexy.

Tom did phone Carrie and told her about going to the dinner dance Saturday and what Linda had said about the dress code. It seemed to Tom that Carrie was excited to be going to this affair.

On Saturday when Carrie opened her condo door, Tom thought true to her style she was wearing a form fitting dress. This dress was dark blue with some white trim and was knee high. The dress was strapless which drew his attention to her two nice breasts. She looked extremely beautiful.