TICN In The Press: February 22nd, 2004

"Shares club pays handsome returns" by Fiona McGoran
Pat Lynch joined the Investment Club Network in 2002 and made a 62% return by the end of his first year of trading; he has made a cumulative gain of 190% to date.

"I consider myself to be a calculated risk taker. I have all my research done before I invest. From my experience, very few people do this," he says.

Being an accountant, Lynch was always interested in the stock market but he did not have the experience or knowledge to make substantial returns. "One of the few coups I experienced was with Eircom. I was one of the lucky punters who sold within days of the company going public. I made a gain of 18% on my investment. With what I know now I would never have invested in that stock," he says.

In late 2001 Lynch, 48, sold the company he had set up in 1998, giving him a substantial amount of disposable income to invest. "I decided to look at the stock market as a means of making returns on part of the proceeds from the sale of my business. A friend informed me about the Investment Club Network and I joined a share club in Cork - the Rebel Club."

Lynch attended a weekend seminar on the basic principles of the stock market and then took some more advanced courses.

"Within 90 days I had a deep understanding of how the stock market worked. I found that being part o f a club meant that I was mixing with like-minded people where we were able to share many ideas," he says.

According to Lynch, one of the most valuable lessons he learnt was the importance of carrying out fundamental analyses on companies.

"You need to know how much debt is in the company; what the sales and profit growth have been for the last several years and what the projections are going forward," he says.

Lynch chooses stocks from companies where the management owns part of the business. He also likes to see profits reinvested in the company.

"When you analyze all the companies out there it is surprising only a few fit my investment criteria. The same names keep reappearing - Cisco, Oracle, Pfizer, Starbucks, Dell, Home Depot, Walgreen, Nokia and Quiksilver," he says.

Lynch then applies technical analysis to these companies. This involves sitting down for a few minutes each day reviewing charts. He then chooses one or two companies to invest in out of a list of about 30.

"I like to buy what I call 'fallen angels'. Sometimes a company misses its earnings by a cent and the value of the stock falls suddenly. From my charts I can see institutions selling shares and I usually buy on the first day they stop selling.

He tends to buy when the stock price is at a six-month low. Within three months the shares usually make a full recovery and then he sells it.

"I have also learnt to trade with an online broker on the internet, which costs me about $13 (10) a trade and I do not pay stamp duty as I only trade the American market. This also means I can trade from anywhere in the world once I can get access to the internet," he says.

During 2003, his best returns were from the following stocks: Humana which he bought at $10 and sold at $17; Nokia bought at $15 and sold at $20; Pfizer bought at $29 sold at $35, King Pharmaceutical bought at $13 sold at $16 and Concord bought at $10 and sold at $15.