Hello everyone, hope you are enjoying the last bits of summer. I for one am excited for the change of seasons and for people to get back to business and school.

On that note, a bit of a story this week that might help the high school seniors out there.

Also, the life of a trader.

Have a great weekend.

Eddie

I had an interesting conversation with a soon to be Grade 11 student at my old school, where I’ve done a few broader presentations to the seniors about money, investing, the importance of starting young and using time to your advantage.

Jimmy showed up with his dad, and the principal was also present. Evidently, he had just told his dad that he wants to go to Australia for university and start learning about business and investing.

Despite what sounds like mediocre grades, the fact this kid initiated this process by his own choosing demonstrates character. Success in the working realm is not all about book smarts - potentially helpful, yes - but identifying problems, finding solutions, selling those solutions, and having some character and common sense are hugely valuable. And as the old adage goes, “the A students usually end up working for the C students anyways”, I told him.

Grade 11 is a critical year to get things in order when it comes to university prep. Applications usually start at the beginning of the grade 12 year. So moving things along earlier makes a lot of sense. Working to improve grades is important, but it’s hard to suddenly dial up to the 90% range. So he’s going to need to do something that he can talk about that helps him stand out.

One of the ways to do that is through entrepreneurship. He could try starting a simple business like pressure washing, gutter cleaning, or car detailing. Buy a $200 pressure washer, walk the neighbourhood and charge $60 bucks to clean driveways. Four customers and you pay off the machine. Do a good job, you have repeat clientele who will give you referrals, eventually you’re making some pretty good money.

In my case, a few years later during university, I ran a landscaping business. It wasn’t exactly the same situation as being in high school, but it was this experience that set me apart when first applying for finance jobs in Vancouver all those years ago. Rather than being interested in asking about my finance courses, the person who eventually became my boss went straight to the section of my cover letter that mentioned this landscaping company.

We wrote a business plan, borrowed $2,000 to buy a 1998 Dodge Ram 1500 (only $800 bucks) and various tools. We got customers by handing out flyers, then word of mouth referrals. There were some 17 hour days, but also some half days on Friday to get to the lake. Not only did we have the best summers of our lives, but we made more money than we could have workin for someone else.

One of the most important things you learn during this process of selling is how to deal with “no’s”….hearing “no” shouldn’t be taken as some sort of attack against your personality. Instead, it should tell you something.

Let’s say you make 20 prospecting calls and 18 people say no. That means 2 people said yes. Now you have your number: for every 20 calls, you get 2 sales. Now, with the next 20 sales calls, instead of being disheartened with the first “no” you can just say, “Great, all I have to do is hear 17 more and then we’ll get a yes.” (I read a great book on this in my 20s called Prospecting for Customers).

Anyway, for Jimmy, the whole point of considering something like this is to build something he can tell a story about.

The conversation turned to general investing and the stock market world. He has some interest, and I suggested he should start investing right away, picking stocks and learning about the market. Maybe a handful of individual companies that interest him and some SP500, but he has to research and pick them himself. A great book called One Up on Wall Street, by Peter Lynch, will get him excited and teach him a ton about stocks.

Over a year of investing, he’s probably going to have a lot of losers and hopefully some winners. Not only will this help with his business school applications, by the time he graduates university he’ll in theory have 6+ years experience. This will be invaluable for any job in the finance world should he choose that route. Alot of people think they want to be in the investing world, but a manager will see right through that if there’s no self directed experience to back it up.

I suggested his dad set up an account for Jimmy with $1,000 bucks and hand it over. No fake trading accounts. Get the real money at risk, it makes a big difference.

Another good idea is consider a subscription to The Wall Street Journal for around $15 a month. He can start learning how the world at large is operating and how the world of business, economics and finance functions.

Near the end, the principal mentioned that her husband, who runs a large tooling business, had seen some of my content and wondered if I could help his employees with their personal finances. The timing was interesting because I have recently been exploring the idea of delivering personal finance education directly to company workforces.

We are setting up a meeting set up to discuss it.

All of this happening reminded me of something my uncle told me years ago:

“Eddie, good things happen when you just show up.”

This was a good example. Jimmy and I both showed up.

Speaking of stock markets, day to day it is highly unpredictable, especially when you delve into individual names.

For example, imagine the biggest company in the world reports earnings on a Wednesday morning, the results blow through analyst expectations.

You predicted this “beat” vs the wall street analysts, so you bought ahead of the earnings release, only to find on Wednesday trading the share price drops at market open and falls 3% throughout the day.

By the end of the day, you are second guessing your position, even though you predicted the better outcome. Now you think “maybe the market is telling me something I didn’t know”, you sell and close your position at a loss by end of the trading day.

Only to wake up on Thursday and the stock market is up 9% and flirting with all time highs.

That is a real story of NVIDIA earnings and price performance this week.

That is the life of a trader.

For everything else, there’s the simply investing masterclass, where I go through everything you need to know about DIY investing, using low cost broad market ETFs to outperform hedge fund managers, how to set up your portfolio, use time and compounding to your advantage, and how to easily avoid the worst pitfalls in investing.

“Good things happen when you just show up”

—my uncle

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