Wednesday, September 02, 1998

The Panic-less Perspective Fribble
by Selena Maranjian (TMF

I recently had the pleasure of attending the "CompuFest" conference of the National Association of Investors Corporation (NAIC). We Fools can sometimes get a little carried away, thinking that we're a groundbreaking investing community. Well, we are. But four decades before there was an online community called The Motley Fool, there was the offline NAIC -- championing investment clubs.

Looking around the large banquet hall, where some thousand NAIC members were enjoying salmon and tiramisu, I spied a great range of people, from grandmothers to teenagers to even younger kids. (Some grandparents had brought their descendants to participate in the special Young Investor program.) I've been investing for a few years, but many of these people have been investing for decades. And doing well at it, too, it's important to add.

So, fast forward a few days, to the week of August 24 to 28, 1998. On the 27th, the Dow dropped 357 points, and then 114 more on the 28th. The Nasdaq fell 4.6% on the 27th and another 2.8% on the the 28th. Shocking plunges, to be sure. Was America rattled? Most of it was, yes. Just look at some headlines I noted on online newspapers:

The Boston Globe: "Dow plunges; investors look for safe haven in Treasury bonds"

The New York Times: "Markets Jolted, Dow Off 4.1% as Russian Economy Slides"

The Fort Worth Star-Telegram: "Global selloff is extended, with Dow threatening to sink below 8,000"

(The Louisville, Ky. Courier-Journal didn't mention the market plunge on its main screen -- its prime real estate was devoted to the homecoming of Wynonna Judd.)

As Fools, we know better than to panic. We know to focus on the long term. To not let our palms get sweaty when the market drops, as it inevitably will do now and then. But that's easier said than done, is it not? Especially for those of us who are relatively new to investing.

How comforting it was for me to stumble upon an online discussion among seasoned NAIC investment club members today. This day capped a three-day drop of some 550 points in the Dow. A 13.8% drop since the summer's high of 9338. Big news, for stock market watchers. (Although, tellingly, not so much for watchers of individual stocks.)

So what were these NAIC folks discussing? Here are some titles of their posts:

"How do you handle departing members?"
"Figuring the basis of transferred stock"
"Silent club members"

Not sensing any panic there? Well, I didn't sense any, either, as I read the posts. In fact, the biggest topic of the day was: "What's on Sale."

How perfect. The market plunges and these investing veterans are wheeling their shopping carts down the aisles, checking to see what's on sale.

A lesson for all of us.

Anyone interested in forming an investment club (or anyone in one who'd like some ideas and a Foolish resource area) should head over to our new investment club area. We've also got a new primer available on forming and running a club.

[Hey Fools, why not pen a Fribble, yourself? We welcome submissions from readers. Just click here and read the "What's a Fribble?" item, pen a short masterpiece, and send it off to TMF]

Have a similar tale?
Talk about it in the Fribble Message Folder!