My Son is Destined to Become a Hedge Fund Manager…

 

 

My oldest son, Charles, is seven years old and still has only a nebulous idea of what I do professionally. He knows I “go to an office to make money” and that this involves staring at a set of monitors all day. But he has no real clue as to what I’m actually doing when I’m squinting at the screens and pounding out orders, and I can tell that he’s too embarrassed to ask.

Every boy ought to understand what his old man does for a living. So, last night, I decided to sit him down and explain it.

Me: “Charles, do you understand what I do at work?”

Son: <Somewhat sheepishly> “Um… make money?”

Me: “Right, right. That’s what everyone does at work. But do you know what I actually do when I’m in the office?”

Son: <Embarrassed pause>

Me. “You like Nintendo, right?”

Son: <Suddenly perks up> “Yes!”

Me: “Well, our family owns a tiny little piece of the Nintendo company.”

At this point, I really have his attention. A little light flips on behind his eyes; suddenly my son feels pride in being the owner of a little piece of Super Mario Brothers and Zelda.

Son: “But… how?”

Me: “The Nintendo company is dividend into millions of pieces called ‘shares of stock.’ We own some of those.”

Son: <Enthusiastically nodding>

Me: “You understand what a market is, right?”

Son: “Um… it’s like a store where you buy stuff.”

Me: “Exactly. There is a market for shares of stock — the stock market — and that is where I buy the little pieces of the Nintendo company. That’s what I do at work. I help other families buy little pieces of companies that I think will make them money.”

By now, the wheels in his head are really turning. He turns away for a minute, lost in thought, before turning back to me with a very serious look on his face and his hand balled into a fist.

Son: “But Dad, if we only have a little piece of Nintendo… why don’t we buy a lot more and then DESTROY the other owners?”

He pounded his fist on the table for emphasis.

I didn’t have a good answer for him other than “Son, it’s not a win/lose game with the other investors. We can all make money together.”

Clearly, my son is not destined to be a passive indexer. He appears to have the killer instinct of hedge fund master of the universe.

‘Atta boy!

 

 

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.