Stockbridge — On a chilly Tuesday afternoon, four teens gather at the Stockbridge Public Library; however, they are not weighed down with books.
Guided by two local investment experts, the high school youth are fed pizza along with the basics of investing in traded stocks as members of the Future Fortune Club for Teens. A competition is in play as well, one that can yield significant financial rewards to the tune of $5,000, $2,500, or $1,000 scholarships. Participants are required to attend meetings and perform market research before choosing one to three stocks to follow, tracking those stocks from November 15 until May 15 to determine which three members have the best overall combined performance. However, investments with actual funds are not conducted.
The program is the brainchild of retired Wall Street trader/portfolio manager Jon Budish and Matthew Chester, a securities lawyer turned financial advisor with his own firm, Tableaux Wealth.
For 70-year-old Budish, the project is a way of “giving back.” “I see a pressing need for financial literacy everywhere I go, and I think it’s really important to get kids involved as early as possible,” he said. “The whole point is to teach [teens] how to think about risk and how to get to retirement.”
The duo does not speak about complex concepts but, according to Budish, addresses “how [to] build a portfolio through your life so one day when you’re not working anymore, you can live a comfortable life.” “The key, though, is to start when you’re young,” he said of the difference in the amount of investment risk warranted by a young adult and a senior citizen.
Although the Stockbridge program is in its infancy having had only two sessions to date, Budish conducts the project at four high schools and one college in New York City, where the part-time Stockbridge resident also has a home. “We’re trying to get young folks involved who have never thought about this stuff,” he said.
Budish asked Stockbridge resident Chester to join him in facilitating the program as the two finance wizards have known each other for about a decade and possess a shared desire to promote business and education in the area. Budish previously sponsored an investment club at Monument Mountain Regional High School.
“The idea is to get kids thinking about how to select a stock and follow it over a time frame,” Chester said.
But there is also a benefit for Budish and Chester in their interactions with teens as to what is relevant in their world: cryptocurrency, bitcoin, quantum computing, artificial intelligence—all commodities embraced by youth that could be a new investment source.
“I’m always looking for the next great thing,” Budish said. “I use my knowledge of working in the industry for all these years, and then I see a bright, young kid with an idea, and sometimes it will hit me in the head. [I’ll say], ‘Oh, that’s really interesting.’ And that’s how we trade off ideas.”
Youth Librarian Rachel Nicholson took a chance on the program’s success in Stockbridge, recalling her high school years during which not even a single class referred to investing, financial literacy, or the stock market. “To me, it just seemed like a common-sense thing; that’s what [Budish and Chester] talk a lot about, of using common sense for these types of things,” she said. “It was an easy decision of ‘if this is something to introduce kids and teens into something that’s going to help them later in life.’ Maybe if they’re not getting it at school, they can get it here at the library.”
A group chat within the club offers a way for participants and program leaders to message insight into what is going on with the market on a daily basis or individual stocks before the next monthly session. Once the in-person meeting starts, the youngsters—who commute from other Berkshire towns—discuss the pros and cons of investments that have piqued their interest, with their selections challenged by Budish and Chester who illuminate stock histories on a large screen.
Lee High School sophomore Gavin Bilodeau signed up for the program to prepare for his future and learn about finance and because of “the promise of the potential for some scholarship money, which is always a bonus.”
The group’s October 28 conversation focused on what it feels like to be an investor, the emotional response elicited when a stock moves up or down, and what an investor does about it.
“The key for an investor over a long swath of time is to be unemotional,” Budish advised.
The introduction of a new running shoe by Nike fostered a banter that pushed participants’ critical thinking skills to determine whether the corporate giant is a “good buy” given the product’s rollout.
Although a couple of teens pitched their preferences for investing in the usual suspects—tech giants NVIDIA, Microsoft, and Apple—one student touted a less-known Chinese coffee company traded on the OTC market whose app-based, bare-bones retail model aims to compete in the U.S. with Starbucks. Another trading novice pushed for an edible cookie dough ice cream company based on a tasting experience he had with his family while vacationing in Maryland.
Budish advised young investors to do their due diligence, “a little boots on the ground research,” and check out who heads up potential investment companies and why. Chester advocated to “always be skeptical” about buying into a business.
“Anything we do here is academic,” Budish said. “We’re not saying ‘buy Amazon’ or things like that. But we are saying, ‘Come up with an idea that you are comfortable taking risk on,’ and when you put your own money to work, then it gets more serious.”
For more information, email rnicholson@cwmars.org or visit the Stockbridge Library’s website.
