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 Author: gorwest
PostPosted: Tue May 29, 2012 5:39 pm 
Lynda Aiman-Smith and I have been meeting for the purpose of getting this local investing concept better developed. Lynda is a professor of business and actually knows how to talk about this stuff, so she is going to do a series of articles, posted here and at The Grant County Beat, that are sure to make us smarter. She's already made me smarter, though it probably doesn't show.

I believe Lynda will introduce herself a bit more below. The first installment will follow soon.


 Author: lalalynda
PostPosted: Wed May 30, 2012 6:51 pm 
What do marshmallows and investing have in common? The answer is Delayed Gratification! Let me explain.

Forty years ago psychology researchers at Stanford and at Brown University ran a series of experiments with four year olds. They sat the youngster in a room with a marshmallow in front of them, and told them they had a choice...they could eat the marshmallow now, or if they could wait a few minutes until the researcher returned, they could have TWO marshmallows.

Longitudinal follow-up of these children showed that those who could hold off on eating the marshmallows, those who could delay gratification, over time were more likely to graduate from high school and college, do well professionally, have good stable relationships...in short, they did better in many aspects of life.

Investing means putting resources into something NOW that is supposed to add value LATER. Investing imeans delaying gratification.

Four decades ago, when I started my professional life and began making money, I wanted to invest for my
future life. My professional life morphed from being a serial entrepreneur, to being a manager in a Fortune 500 company, to going back to graduate school, and becoming a professor teaching MBA students and consulting with major organizations. When I started that professional evolution, there was persuasive data that if you bought a diversified portfolio of stocks, mostly of US companies where you used the products, and which you could find out information about
the strategies of the companies, and held them, you would be able to make a reasonable rate of return.

Fast forward to now. Two things have changed dramatically. First, corporations have no geographic loyalty. Second, investment as it is now practiced is extremely short term.

Corporations have no geographic loyalty. The corporations that I used to think of as being American, actually are not. They are global conglomerates, with an emphasis on short term profits. When I started buying stocks back in the late 1970s, executives in the companies whose stock I bought made about 30 times what the average professional working in the corporation made. Now these same corporations are paying out executive compensation packages that are 475 times what any average worker in the firm makes. As a management professor I tried to find real connections between a geographic location, a town, of these international corporations. I have come to see that the multinational corporation has no "local home;" hence no honest interest in supporting any local community. The sole interest is in profits....preferably this quarter's short term profits.

Investment as it is now practiced is extremely short term. Buying stocks, mutual funds, ETFs, and other financial products is no longer about buy and hold. It is about exceedingly short term transactions and profits. A particular type of trading firm has emerged in the past few years. using high speed computers, with powerful algorithms. These traders buy hundreds or thousands of shares in one transaction, and then sell them less than a second later. These traders can move millions of shares around in minutes. If they earn even tenth of a penny off each share, they can rake in billions of dollars of profit each year. This is not investing...but these types of financial transactions dominate.

I no longer have any confidence or respect for the idea of investing as being about putting money that I have into stocks, mutual funds, ETFs, I have had a metanoic shift. I want to invest locally. I actively want to have my money move slowly.

Where I live (here in Silver) is important to me. I am a multi-generation New Mexican. This beautiful land, and community, have high importance and value. That is the value I want to enhance.

I want to have some of the money I have prudently put aside over time flowing to local small entrepreneurs, local social entrepreneurs, local food producers....I want my money working in my community. My aim is to put resources into something NOW that will reap LOCAL value over time. And for me, value does not mean a quick profit, or an amazing rate of return. Value can be many things.

Gordon West and I are forming a Grant County Local Investment Opportunity Network....a group of people who want to improve our local economy by investing where we live. We are thinking angel micro-loans, and other forms. We will convene a meeting and announce when and where. Let's talk. Let's work together.

For other reading, if I have peaked your interest.

Goleman, D. (1995). Emotional Intelligence: Why It Can Matter More Than IQ. Bantam books.

High-Frequency Trading (Oct 10, 2011). New York Times. Accessed May 30, 2012 from

Lehrer, J.(May 18, 2009) Don’t!. The New Yorker, Online version. Accessed May 30, 2012 from

 Author: gorwest
PostPosted: Fri Jun 01, 2012 4:53 pm 
We are going to try and make the meetings more regular (there have been two so far) and include an educational presentation along with open discussions of local investment opportunities as they are brought to the group. I have had discussions with both the Green Chamber of Commerce and the Small Business Development Center about sponsoring/hosting the meetings, with the intent of creating a rich resource environment for local entrepreneurism.

If you have any comments, please toss them out here!

You can see Lynda's first column in a series of six here: http://www.grantcountybeat.com/columns/think-local/5980-think-local-first

 Author: gorwest
PostPosted: Fri Jul 13, 2012 9:20 am 
Okay, the next meeting of folks interested in local investing will be held on July 18th from noon to 1:00 in the conference room at the Global Resource Center. In case this is new to you, we are gathering an informal group together to discuss, and stimulate, more local investing in our community. Lynda Aiman-Smith, a long time entrepreneur and professor of business, is now leading the charge. Bruce Ashburn, of the Small Business Development Center, is helping to facilitate our group and the SBDC stands ready to help out with its array of business assistance services. But this is mostly about people with a common interest in local investing getting together and finding synergies.

Lynda has had conversations with many of the local banks and credit unions, as well, which will play a significant role in local investment possibilities. Bankers are welcome!

Lynda will:
1) give an overview of how important it is for a local economy to have a variety of local funding.

The group will toss around;
2) what a Grant County / Gila Local Investment Opportunity Network WOULD be and WOULD NOT be.

The group can share actual investment ideas and opportunities:
3) Discussion

All you need to qualify to attend is an interest in the local economy - you don't have to be a ready investor, and you don't have to be looking for someone to invest in your enterprise.

Hope to see you there,
Gordon West

 Author: gorwest
PostPosted: Mon Jul 30, 2012 9:12 am 
Following is a report from the recent meeting of the Grant Co./Gila Local Investment Opportunity Network:

The newly founded Grant County/ Gila Local Investment Opportunity Network (GCG-LION) was hosted by the Small Business Development Center at Western New Mexico University for a general information meeting on July 18, 2012.
Here is a short summary of what the GCG-LION is and is not, and some of our goals.

GCG-LION is a way to connect local investors with local businesses that need additional resources; capital, partners, or just advice. This is a way for those of us who are committed to a vibrant local living economy --you and me --to keep more of our money circulating in Grant County.
The members of GCG-LION will act as a network to match potential investors with potential business opportunities. All opportunities must be “non-public transactions.” That is, they must be funded by individual investors who know each other – and the possible business owners – well. We will not be pooling money to form a venture fund. We will not be pooling money to form an investment club. We will not serve as a bank. We will not serve as a financial institution of any kind. We will be an opportunity network.
GCG-LION has three major goals:
1) Learning and thinking about INVESTMENT in a different way.
2) Putting money to work locally to enhance small business opportunities;
3) Mentoring for people who are in their own small businesses. Businesses often need a range of resources, not just cash – investors can bring knowledge, skills, and greatly increased word of mouth marketing
At the meeting we had on 7-18-2012 a number of potential ways to work on local investment were brought up, including the following:
• The GCG-LION as a forum to discuss real investment opportunities. Project-centric learning is much more effective than talking in the abstract.
• Purposeful meetings can take many forms. The potential investors need to get to know each other more. We can have social networking events where investors and businesses can continue to get to know each other. We can have meetings where people with ideas to start or expand their businesses have posters and all the attendees have chances to discuss.
• Members of GCG-LION can urge some of the Grant County businesses (GRMC, WNMU, Freeport, and others) to source more locally
• Members of GCG-LION can discuss policy issues (e.g. urging legislation in NM for L3C corporations -- low-profit limited liability company). The SW Green Chamber has agreed to carry policy issues to the legislature.

Next steps: We will use a potential business opportunity as a project example and will use that to help kick-start discussions in the next meeting.

Sources that have inspired GCG-LION:
The Southwest Green Chamber of Commerce
The first Local Investment Opportunity Network developed about 6 years ago in upstate Washington
The Business Alliance for a Local Living Economy (The Southwest Green Chamber is a member)
A short and informative video at TED Maui by Amy Cortese, author of Locavesting
Cortese, A. (2011). Locavesting: The Revolution in Local Investing and How to Profit From It. Wiley Publishing.
Shuman, M. (2012). Local Dollars, Local Sense: How to Shift Your Money from Wall Street to Main Street and Achieve Real Prosperity. Chelsea Green Books.

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