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March 26, 2003 - ICLUBcentral News

NAIC Software News March 26, 2003


Barb's Tips: Stock Analyst Plus - Improve Stock Picking with Additional Graphics Function
by Barbara DalMaso, ICLUBcentral

As you know, the SSG Graph charts sales, EPS, pre-tax income, and prices. This data often provides a comprehensive picture of a company’s historical status. However, there are occasions when you may want more information to help with your assessment.

When viewing the SSG Graph in Stock Analyst Plus, you will see the floating toolbar button labeled ‘Selected Graphics’. This button provides access to 26 additional items for graphing. Here is the list:


Pre-tax Income

Common Equity

High Price

Low Price



Dividend Yield

Pre-tax Income on Sales

Long Term Debt


Number of Shares

Cash Flow



Book Value/Share

Return on Common Equity


Price/Book Value

Average High P/E

High P/E

Low P/E

Implied Growth

None (no data plotted)

Net Income

Tax Rate

At the top of the Selected Graphics window are three drop-down menus. Each contains all 26 items. (You will need to scroll down to see them all.) Highlight an item to display it on the graph. Use the scaling spin control (the button with two arrows) to minimize overlap of the lines.

As well, if you choose related items (i.e., High and Low P/E), choose the item with the highest value first (left-most list). Often this will make the first item plot above the second, providing a more logical representation of the data.

Each column shows three pieces of data.

  • The first reports the percentage growth for the plotted data,
  • The second reports the R2 (R-squared) consistency figure for the data shown. (1.0 would be the ideal straight line), and
  • The third figure shows the scale factor used for plotting (as also used in the SSG Graph).

On the graph, the right end of each plotted line shows the item’s actual value for the last reported year.

Once you have made your selections you may choose to print the Selected Graphics chart. The resulting graphs should provide new information to help clarify unusual situations - truly an example where ‘a picture is worth a thousand words’.

The Selected Graphics window may be considered a more advanced feature of Stock Analyst Plus as items chosen depend upon what insight you are seeking. Some examples in the manual include:

  • Return On Equity and Implied Growth
  • Dividend and Dividend Yield
  • Revenue per Share, Book Value, and Number of Shares
  • Show potential growth due to re-invested earnings
  • Actual income growth from investment
  • Some of the components that show how revenue builds equity

Other combinations may be devised to help assess unique situations.

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Investment Club Therapist: Filling a Club's Leadership Vacuum
by Doug Gerlach

Dear Doug:

We are in a club with 10 members. Two of us have been co-senior partners for two years. It's time that someone else carries the responsibility. We are trying to find a solution that works. No one has expressed an interest in taking on this job. Do you have any suggestions as to how to handle this? We do have a Treasurer and Secretary who are willing to continue. We do not wish to disband, especially at this time. Help!

- Wendy S.

Dear Wendy:

One of the key advantages of an investment club is that the members can pool their money, share their knowledge and, perhaps most importantly, divide up the workload that's required in order to manage a portfolio of stocks. After all, an investment club won't operate by itself without any effort or leadership on the part of its members.

One of the major themes of my book, Investment Clubs for Dummies, is that every person who starts or joins a club should have a clear idea of what's expected from them as members. That goes way beyond the few dollars a month that members pay into the club, but also their responsibilities to attend meetings regularly, conduct research on possible new investments, track stocks in the club portfolio, and serve as officers.

Even if your club didn't outline specific member responsibilities, I find it hard to believe that your members initially came together to form a club with the expectation that they would never have to serve as officers. With this collective amnesia now affecting many of your members, how can you jog their memories?

As with many club dilemmas, it's best to clearly define all of your operating procedures and expectations in your partnership agreement and bylaws. You can modify these at any time, so you can address problems that you may not have anticipated when you started your club. With 10 members, you might consider adding some stringent language about how every member must serve at least one term as an officer every three or four years. (Of course, your members need to agree on the changes, which may be a problem if they're reluctant to serve as officers.)

Another strategy that some clubs have adopted is to abandon elections altogether and rotate officer positions alphabetically. A member would serve successive terms as Secretary, Treasurer, Vice-President and finally President, and would then retire – at least until their name came up again in the rotation. New members would be added to the bottom of the list. This method ensures that members understand that an investment club is a cooperative venture that won't succeed if members refuse to fully participate.

A more immediate problem for your club might be your upcoming elections. Here's the real issue: if members don't want to serve as officers, what are they willing to do for the club? And do you and your fellow officers want to be in a club where not everyone pulls their weight? I'd attempt to nominate candidates and hold elections at your annual meeting, and if no members step forward, then put forth a motion to disband the club. Your leadership vacuum is a serious matter for your club to consider, and it's usually better to close down a dysfunctional club rather than try to keep it going on the backs of a handful of hard workers.

- Doug

Doug Gerlach, author of several popular investing books and websites, serves in his spare time as Secretary of NAIC's Computer Group Advisory Board. To ask Doug an investing question yourself, just write to!

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