First write everything down. Who paid in what, get things notarized, etc etc. Keep track of who is going to get paid what and let everyone know that they can lose everything. Write up HOW decisions are going to be made regarding the portfolio...
Even if they don't lose, put it in writing before hand.
How very true. Keeping track is essential, and I've come to think that everything should be 100% in-or-out, meaning everyone always pays the same. Trying to separate profits when one person put in a quarter of what everyone else did means only more headaches.
Plus, I'm dealing with several poker players here. I think they're understandable with losing the money they put in. Heck, their odds are better at this than poker most of the time!
otherwise you can get in trouble with the state.
Very sound advice. Thank you very much. Administering fees, etc, really wasn't in my plans, but good to know. If everything is decided as a group, there's less of a chance, as you mentioned, as me being coined the organizer.
I am positive we'd need to have a 'rules meeting' of some sort and come up with ground rules for the group. Rules, such as, a unanimous vote is required to invest the group's pool, or something like that. If you can think of any ground rules that would be very good to mention, please, by all means, let me know!
Task #1: figure out who is going to make more money than the competition.
Easier said than done, but investing is 90% research and 10% luck, not the other way around, at least for professionals...
I put in a month of Sundays worth of research before I would buy anything. If you do your stuff right the market won't pass you by.
The first time I ever did a full on model I tracked the stocks of a particular industry for a few months and read every jot and tittle I could about the industry... I interviewed people. I asked questions. I read about 1000 balance sheets. I learned who was integrated how.
The result? In a non internet industry (oil)(for my project) I netted over 800% returns in just over 6 months under real market conditions. That does not happen every day, but it was interesting when it did! I was in the right spot at the right time. Too bad I was a student and had no real money to put into it...
Study the company and its composite make-up. What makes its top line and what makes its bottom line. Not what is the bottom line, but what makes it what it is...
Then compare that to all the others in the same industry. When you get corporations that are conglomerates of many unrelated industries that can get complex....
Geography matters as well. Where are they making the money? Many corporations earn revenue globally... figure up the revenues country by country if possible....
Just imagine a car engine... take the whole thing apart and compare parts from one engine to the other... The carberator on this one is XYZ... the pistons on that one are ABC....Then come up with how each component creates what you see in the balance sheet (or in how the engine runs)...
Homework pays. Put it that way.