MEMORANDUM

TO: Executive Committee
FROM: Eddie Underhill
DATE: November 19, 1997
RE: Progress on the investor club handbook.

The following will bring you up to date on the progress I have made on our club handbook. As you recall from the September 28 proposal, I am working on a project to put together a comprehensive array of information and instruction for orienting our new members. In your acceptance of the project, you agreed that we should print enough handbooks to provide all current partners with copies for their review and reference.

Overview of the Project

Upon your approval I immediately began collecting the necessary data for the handbook. I first set out to comply with your suggestion to include a sample page of Standard and Poor's as well as Value Line in the study guide section. I have already obtained a copy of both reports on Dell Computer so as to present a good comparison of the data included on each report. In fact the majority of my time thus far has been spent on the instructional section dealing with the use of Value Line (and, to some degree, Standard and Poor's) in preparing an NAIC Stock Selection Guide. Because of its importance, this section is the most complicated and detailed in the handbook, dictating that I spend a great deal of time ensuring its accuracy and completeness. The report project can be divided into three major tasks:
  1. Collecting and organizing the information specific to our club such as the Partnership Agreement, the Rules and Procedures, the Statement of Purpose and Objectives and the Membership Roster.

  2. Researching the available and requested documents from our parent organization, National Association of Investment Clubs; summarizing the use and importance of the NAIC manual; compiling a list of the available NAIC materials; detailing the Dividend Reinvestment Program (DRP); and explaining the investment tools used by NAIC.

  3. Composing the instructions for the club study guide on using Value Line and Standard and Poor's in order to complete the Stock Selection Guide and other NAIC tools.

  4. Developing and compiling the graphics to adequately illustrate the instructions as well as some of the basic concepts of investing.

My work on the first task is nearly complete, although I am still working on the precise wording and organization of the section dealing with partnership and financial responsibilities. Most of the materials and information relating to the second task have been collected, reviewed and organized to the point that I feel comfortable with its finalization. The third task, on the other hand, is still in the construction phase even though I have spent most of my time on this task. It is the longest and most important of the tasks and I have taken my time with it. The graphics referred to in the fourth task go hand in hand, for the most part, with this third task and, although I know what the graphs will be, I am still working on their conciseness and clarity for instruction purposes.

At this point, I am finishing the second rough draft and, as indicated in my proposal, am on target to have it to you for your final changes and corrections by December 1. The attached report and final outline will update you on my progress from September 28 to the present.

Project Description

For your recollection, here is a review of what this project entails:

Subject. This handbook will contain three major sections: (1) a collection of information and documents specific to our club, such as Partnership Agreement, Rules and Regulations, Statement of Purpose, and Membership Roster; (2) a discussion of our parent organization (NAIC), including its philosophy, procedures, manual, materials, and tools; and (3) a club study guide to instruct new members and be used as a reference for current members on the completion of the Stock Selection Guide and the understanding of the other study tools.

Purpose. The purpose of this handbook is to provide, in one convenient location, all the necessary data that new and current members must have and know in order to be productive partners in our club. This handbook will bring continuity and vision to our club by providing (1) a concise tool for teaching new members, (2) a reference tool for current members, and (3) a wealth of detailed information about our club to all members.

Topic I: Information Specific to Our Club

My work on this section is 95% complete and just needs some final touches.

Work Completed. The documents needed for this section (Partnership Agreement, Rules and Regulations, Statement of Purpose and Objectives, and Membership Roster) have all been collected and organized. I have also almost completed the report on partners' membership and financial responsibilities and intend to go over this part with the club president for confirmation of completeness before submitting it to the Board as a whole.

In this section, the partners will have access to all the club documents and partner responsibilities, as well as obtain a clear understanding of the objectives and principals of the club. It is here also that partners will have ready access to a roster of all the members, including their addresses and phone contacts.

Work remaining. Depending on the feedback from our president, I only lack putting the finishing touches on the wording and organization of the partners' membership and financial responsibilities section and should finish this section entirely within the next day or two.

Topic II: Discussion of Parent Organization (NAIC)

For this section I obtained most of my information directly from NAIC publications and discussions with our local NAIC Council. I merely organized the material into a logical order based on my original outline. This section was pretty much cut and dry and required little original writing on my part except for transition.

Work completed. I have completed this section in its entirety and have received all the necessary documents and pamphlets from NAIC needed to include all the data. I have also gathered all necessary graphics and sample documents for this part of the handbook. All this section needs is final approval from the Board.

Work remaining. The only work remaining on this section will be any corrections and revisions recommended by the Board for the final draft.

Topic III: Club Study Guide

This section has the most work yet to be completed. Although two-thirds complete, it still needs a great deal of refinement and reworking to bring it to final draft status. I am still working hard at making sure all areas are covered and enough details given to present a concise but thorough study tool for our members.

Work completed. I have finished the detailed explanation of Value Line and instructions for the use of its data in completing the NAIC Stock Selection Guide. I still need to discuss briefly the use and importance of the advanced tools, such as the Stock Comparison Guide, PERT, and the Portfolio Management Guide. I do have all of the necessary sample pages and study sheets ready to include as illustrations and graphics, although some need to be refined.

Work remaining. As indicated above, I still need to write the section on the advanced study tools and, perhaps more importantly and time consuming, the section on the significance of the results from completing the Stock Selection Guide. These two sections are the only major ones remaining and I anticipate spending much of the remaining time before the December 1 deadline on these very two items. In addition, I will review the other sections and present them to novice investors for their feedback on the comprehensiveness of the instructions themselves.

Overall Appraisal

At this point, the work on the handbook is coming along very well and is on schedule as per my original timetable in the proposal. I do not anticipate any problems regarding the project and feel certain that, barring any unforeseen major revisions, I will have the final draft ready for your approval by December 1 and the finished product in your hands by the December 14 deadline. I am very anxious to see the completed handbook and, now that it is almost completed, feel even more strongly that it will be a major boon to the productivity of our club.

Final Outline

 
  I.  Information Specific to Our Club
      A.  Partnership Agreement
      B.  Rules and Procedures
      C.  Statement of Purpose and Objectives
      D.  Partners' and Financial Responsibilities
      E.  Meeting Data
      F.  Membership Roster

 II.  Discussion of Parent Organization (NAIC)
      A.  Procedures and Philosophy
      B.  Content and Importance of NAIC Manual
      C.  Available Materials and Software
      D.  Dividend Reinvestment Program
      E.  NAIC Investment Tools

III.  Club Study Guide
      A.  Overview of Stock Selection Guide
      B.  Overview of Value Line
      C.  Use and Transference of Data
      D.  Significance of Results
      E.  Preview of Advanced Tools