The history of the Birdstaine Ladies
In 1983, 16 women, whose average age was 70 years, founded their Investor Club in Birdstown. Not having enough knowledge in investing, these worthy ladies decided to learn how to manage their money.
The initial investment capital amounted to . A little later, women started adding $25 a month to it.
Ten years later, the club became known as the Birdstaun Ladies. For six years he was recognized by the National Association of Investment Companies (NAIC) of the USA as "stars", women members of the club were repeatedly invited on TV.
In 1994, pensioner investors published a book, "Birdstun Lady's Guide to Reasonable Investment: How We Bypassed the Stock Market and How You Can Too," which contained tips for buying shares and, of course, cooking recipes. By 1998, the book had been translated into seven languages, and the number of copies sold had reached 800,000. By the way, this book can still be bought on Amazon.
The yield of the Birdstown Ladies, which is listed directly on the cover of their book, averaged 23.4 per cent per annum from 1984 to 1993, well ahead of the market. The growth of the Dow Jones Industrial Average for the same period was almost half that, and grew by 14.9%. What's more, the ladies claimed that thanks to their advice such success .
The success story of the Birdstaine Ladies caused a real boom – between 1992 and 1998, the number of investment clubs in the United States grew from 9,000 to 36,000. People believed that if women pensioners are able to earn on the stock market, then they will succeed.
However, not everyone believed in the success of older ladies. The journalists found that the figures in the book were almost doubled due to the inclusion of membership fees in the income. Later, the British auditing company Pricewaterhouse found that the profitability of the "Birdstaun Lady" between 1084 and 1993 was, which is lower than the market. In response, the ladies said that they did not contribute to the income, but simply made a mistake, introducing the figures in the computer program. However, the reputation has already been dealt a blow.
The story continued after the publication of The Wall Street Journal, which quoted reports from other auditors, according to which the average yield of retired investors from 1983 to 1997 outperformed the Dow Jones index and was 15.3%.
Reputational losses did not prevent further development of the club. By 2016, the Birdstaun Ladies included 75% of the founders' descendants. The oldest lady at that time was 89 years old, the youngest – a little over 30. The investment club still exists.
When choosing shares, "Birdstaun Ladies" are advised. At the same time, special attention should be paid to the industry leaders and the debt load of the company. For the ladies, a role model is Warren Buffett, his principle of investing they took from his rules: "We invest money in what we know and understand." For example, when a Walmart supermarket opened in their city, the ladies noticed that the parking lot near it is always full, and its competitor Kmart – not. This was the reason for buying Walmart shares.
Despite their provincialism, club members pay a lot of attention to the financial performance of companies, for example. Only those companies whose total debt is no more than a third of total assets are considered for purchase, and profits have been growing steadily for five years. The fall in the price of shares of "Birdstay Lady" is perceived as a sell-off on "Black Friday", seeing this as an opportunity to buy good papers at a low price.
At the end of 2016, the club's investment portfolio contained shares in 17 companies, including Walgreens, Wolverine, Starbucks, and Buffett's Class B securities holding Berkshire Hathaway. The value of the portfolio was estimated at .
In 2019, older ladies have backed down a little from their principles of buying only what they know, paying attention to "Chinese Amazon" – the tech giant Alibaba. And, as time shows, they didn't lose.