Portrait of a young hedgie


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.

 

investing

 

Job Description

So, I recently 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 know what I actually do when I’m in the office?”

Son: <Embarrassed pause>

 

Super Mario Brothers

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 divided 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.”

 

Tiny Pieces

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?”

 

Rising Hedgie

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!

 

Photo Credit: CafeCredit.com via Flickr Creative Commons

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Charles Sizemore
Charles Sizemore
Sizemore Capital Management LLC is a registered investment advisory firm located in Dallas, Texas. Charles Lewis Sizemore, CFA is the founder and Chief Investment Officer of the firm.