Last week’s answer

Born in Boston in 1986, I pioneered the office supplies superstore concept, aiming to offer small business owners the low prices that only large companies were getting at the time. Today I rake in nearly $12 billion annually, from sales in my 1,500-plus stores around the world and from my Web site. My typical store carries 7,500 items, while my Web site offers 45,000. You may have visited me to stock up on back-to-school supplies. My stock has appreciated nearly tenfold over the past decade. In 1998, I was added to the Standard & Poor’s 500 Index. Who am I? (Answer: Staples)

Kodak’s new look

Eastman Kodak (NYSE: EK) executives have been extremely busy these past few months. The film and processing giant recently took a big step away from its traditional bread and butter, film, by announcing a major realignment to make it more competitive on the digital front.

The company has long been criticized for its underperformance in the digital age. Earnings have lagged, and Kodak stock has lost 16 percent over the past 10 years, dividends included, while the S&P 500 has gained 160 percent.

To turn the business around, CEO Daniel Carp introduced a structure that he expects will help “build entirely new businesses that will position us for growth.” This includes a new commercial printing division to be headed by former Hewlett-Packard executive James Langley.

No pressure or anything, but Kodak says this division is one of the keys in its transformation “from its historical roots in consumer film to a company with a more balanced and diversified portfolio of businesses.”

Much credit goes to Carp and team for finally positioning the company to meet the digital age head-on. But it’s hard to know whether to trust that they’ll actually be successful. Ten years of disappointment is enough to make anyone skeptical.

The stock is beaten down enough, however, to merit a spot on investors’ watch lists. It sports a dividend yield in the neighborhood of 6.2 percent, and this turnaround strategy just might work.

Don’t panic

When I was 22, a family friend who worked at Merrill Lynch told me to buy stock in a small company called Intel. It was at its (then) all-time high of $30 per share. I’d never owned stock before. At his urging, I bought $5,000 worth (my life savings totaled just $7,000). At the first signs of the Gulf War, the market got hit, and Intel fell to $27. I got scared. I watched the stock every day. Stocks, I decided, are not for me. I sold at $30, losing $200 in commissions. Recently, I ran into that man at a family function. My $5,000 investment, he informed me, would be worth several hundred thousand dollars today, had I hung on. — D.S., Chicago

The Fool Responds: It’s hard to keep your perspective when the market tanks. Remember that there will always be occasional slumps, and that as long as you have researched your companies thoroughly and still have faith that they’ll prosper, holding on is often the right thing to do.

Tips on how to be a socially responsible investor

What’s the best way to go about investing in a socially responsible manner? — M.R., Dothan, Ala.

First off, understand that the more socially responsible you try to be, the more difficult it can become to find acceptable companies.

A company may not pollute, but it might have a record of discriminating against women employees or may test on animals. It’s hard to find completely objection-free organizations. Still, you do have several options.

For starters, you can invest in a socially responsible mutual fund. (Note that as with most funds, not all have stellar records.) Learn more about them at www.socialfunds.com and www.goodmoney.com/sefunds.htm.

You also can visit the Web sites of firms that run responsible funds, such as www.domini.com and www.paxfund.com.

Alternatively, seek out companies whose practices you approve of. One spot where you can research various individual firms’ social track records is www.socialfunds.com/csr”>www.socialfunds.com/csr.

Learn more about socially responsible investing at www.socialinvest.org and www.greenmoney.com.

Investment clubs

So you want to form an investment club, pooling your brains and money with others and learning together. Good for you! Here are some tips.

Start with as many as 10 to 15 people. Discuss your goals and expectations regarding workloads and investing styles, making sure they’re compatible. Agree on the amount of the monthly contribution (perhaps $25 to $100) and where and when you’ll meet. Choose a name for your club, elect officers, and file for a Tax Identification Number via IRS form SS-4. Draft a partnership agreement and bylaws. Open a brokerage account. (Alternatively, create a less formal club, where you learn and research together but stop short of actually investing together.)

Consider electing an education officer to plan lessons for the group. Members can read books or articles on investing and business and review them. Perhaps distribute some required reading at each meeting to be discussed at the next.

One member might learn how to calculate a stock valuation ratio and then teach the group. Go on a field trip to a local company or stock exchange. Visit a library together and ask the librarian to show you useful reference materials, such as Value Line stock reports. Consider inviting some guest speakers, as well, such as a veteran investor, a member of a more experienced investment club, or someone who works in an industry you’re researching.

Research stocks, studying companies’ financial statements, competitive positioning and business strategies. Just about all the information you need to evaluate a company is available online.

Avoid common perils: Don’t underdelegate. Expect each member to actively participate. Don’t be impatient; focus on long-term rewards. Understand that this learning will take time. Don’t be all business — have fun, offer refreshments and socialize.

You can learn more about investment clubs at www.better-investing.org, www.bivio.com and www.fool.com/ investmentclub.

Or check out a helpful book on investment clubs, such as “Starting and Running a Profitable Investment Club” by Thomas E. O’Hara and Kenneth S. Janke (Times Books, $15) or “Investment Clubs: How to Start and Run One the Motley Fool Way” by Selena Maranjian (The Motley Fool, $15).