I was in middle school when my mom made me read One Up on Wall Street by Peter Lynch. Friday nights we would watch Wall Street Week with Louis Rukheyser, and Saturday mornings we would go to the library to xerox Standard & Poors and read the new industry installments of Valueline. I was raised on fundamental analysis which is why I dig bloggers like 10Q Detective and FatPitchFinancials.
Stock Market Competition
When my 7th Grade TAG class entered a nationwide fantasy stock market competition, my mom took us on a field trip to the New York Stock Exchange. And it was my mom who taught the class about P/E ratios and volatility Beta.
My class entered two teams in the competition: the Boys team and the Girls team. If memory serves, the prize of the eight week competition was a wopping $10,000. While other kids played baseball and watched Saturday morning cartoons, I spent my weekends graphing P/E channels in the library with my mom.
The Wisdom of Crowds
Imagine my excitement when the time finally came to present my research recommendations to the Boys on my team. I had manila folders packed with due diligence, I was armed to the teeth with statistics and price comparisons. This was back in the day when you had to check stock prices in the New York Times and draw your own charts on graph paper.
I was particularly excited about a grocery store named Walmart. The other boys debated me mercilessly. They had done no research of their own, and didn’t want any truck with me telling them what they should and should not do with their hard earned fake money. I will never forget my friend Ittai boldly staring me down and stating, “Jon, just because you did research doesn’t mean these stocks will go up.” So research was sidelined from our debate.
In Ittai’s defense, he argued vehemently for a stock called Microsoft. No one had ever heard of this company, let alone an obscure exchange called the Nasdaq. I distinctly remember Ittai insisting that Microsoft was a winner, and me rebuking him saying “we’re not going to buy some unknown company that makes calculators.”
In the end, the seventh grade Boys team voted to sink all of their money into Playboy (PLA) and we lost the contest. For what it’s worth, Ittai is now CEO of Portfolio Science and I am co-Founder of ValueWiki.