Where better to discuss investments than over dinner? What Investment meets the Hare Supper Investment Club...

For many years, the Annual Norman Cross and District Hare Supper has been held on the first Thursday in February in Wansford, Cambridgeshire.

The 300 or so attendees are drawn from farmers, land owners and the agriculture industry. Traditionally, the members would hunt hares as pests, eating them for dinner at a large social occasion.

These days the restaurant has to source the hares from a licensed game dealer. Asked for a suggestion to keep in touch with the Hare Supper community, Nic Olsen, a qualified and practised stockbroker, suggested forming the Hare Supper Investment Club.

As a senior partner in a well-known quoted wealth management company, Olsen is well positioned to act as club chairman, giving information and imparting knowledge to the other 20 members.

Living off the land
The membership consists of a cross-section of men and women from the agriculture industry and related
fields. Farmers, landowners and grain traders make up the ranks, among other similar professions.
Given his profession, Nic naturally invests outside the club, while other members invest in varying degrees, depending on their business and personal circumstances.

Most of the members did not know each other before the inauguration of the club, but many close friendships have now been formed. Each monthly meeting is a social occasion, held at the Farmers Carvery & Grill, Yaxley. Meetings commence with a drink at the bar followed by a two-course meal.

Once the members are refreshed, a formal investment club meeting takes place using a laptop and screen projector to give online access to their share account and research facilities.

The social and friendly nature of the club is extended to further events funded by the club. For example, the club recently used profits to fund a social and educational outing. After enjoying a seminar at Newmarket racecourse, they treated themselves to a Jools Holland concert.

All members have access to the club’s share account online and use share.com to research shares and keep up to date with the markets.

After completing their own pre-meeting research, members nominate shares to be put on the club’s watchlist. A share will then be proposed at the meeting, seconded and then finally voted on by the membership.

If successful, the share will be purchased the following morning. The club takes an unfettered approach to choosing investments. Since the members are mostly farmers or closely connected with agriculture, they have a good knowledge of commodity markets. However, no industries are discounted and the club seeks out profit potential right across the board.

Diverse crop of holdings
The members’ current portfolio reflects this, including companies as diverse as BP, Tesco and Greene King, the brewer and pub company. Some shares are held for three months, such as oil and luxury goods companies, whereas larger blue-chip companies can be held for years in order to take advantage of the dividends on offer.

The club’s portfolio currently contains only seven shares, a relatively modest number. This is due to the fact that the membership voted to sell its entire portfolio at the end of the last tax year and start again. This date marked the club’s third anniversary and as Olsen confirms, ‘It’s never wrong to take a profit.’

Bearing in mind that the members had each contributed an initial investment of £500 and then paid in £50 each month, the healthy 33 per cent profit they achieved provided a nice lump sum for each member when divided up.
Over this period, Olsen identifies IDS, Domino’s Pizza and ARM Holdings as particularly successful investments. However, some of the best decisions taken by the club were made by the female members.

Mulberry and Burberry have been two of the club’s top-performing investments. The club members have historically liked to have a range of assets in their portfolio, with funds, ETFs and direct holdings of bullion making a significant contribution to their profits.

Doing it by the book
When asked what advice he would give aspiring clubs, Olsen recommends the ProShare manual to give the club a good structure. He is also a big believer in doing your own research, not believing everything in the newspapers and making ‘collective and unemotional decisions’.

Another key ingredient of the club’s success involves the maximum number of investments held and the maximum number of members. These are 25 and 21 respectively. The reason? At meetings, 21 people is the maximum that can clearly see the projector screen while sitting around the dining table, and 25 holdings fills up a page on the screen.

A good mix of long- and short-term investments
The club favours a mix of shorter- and longer-term investments, which is often the case for investment clubs.
If the club only invested in larger, blue-chip companies and funds for the long term, then member meetings would be boring due to the low turnover of investments. It’s therefore a good idea to have some shorter-term investments to add a bit of excitement and discussion to the club’s meetings and votes.

Currently, the club is building on a small base of blue-chip companies, but it also has Desire Petroleum in its ranks. Bearing in mind the company’s price history, I can only assume that this is the club’s one-off incredibly high-risk punt. Again, it is quite typical for investment clubs to have a gamble or two to spice things up.

I am very interested to note the club’s decision to sell its entire portfolio after three years of trading. This is certainly a very bold decision and quite unusual. I’d certainly concur with their ethos that it’s never wrong to take a profit.

However, by selling all investments, the members took a large gamble on what direction the market would take. As it turns out, they must have been quite pleased with themselves since the market fell for the next two months after they went liquid. But hindsight’s a wonderful thing.

Bearing in mind Nic Olsen’s career as a stockbroker and a senior partner in a well-known quoted wealth management company, the club clearly has someone with a level of expertise that many other clubs are not lucky enough to have.
I’m sure that this is a great help to the club, but it also needs to be somewhat careful that he doesn’t become the centre-point of the club or a dominant member.
It sounds like the Hare Supper Investment Club is run impeccably and democratically. However, it’s worth noting that I have come across clubs in the past with one or two dominant members. In these circumstances, some of the less vocal members can start to feel scared of speaking up and therefore feel like they are not contributing
to decisions.

This can lead to membership churn and can take the fun out of the club, which is one of the main objectives after all.  

Graham Spooner, investment adviser at The Share Centre, appraises the Hare Supper Investment Club’s strategy