Listen For The Cadence

by Mark Robertson, Senior Contributing Editor, Better Investing

We Are NOT Afraid … To Be Millionaires!

“Youth! There is nothing like youth. The middle-aged are mortgaged to Life. Youth is the Lord of Life. Youth has a kingdom waiting for it. Every one is born a king, and most people die in exile.” — Oscar Wilde (1854-1900)

I thought I understood [investment clubs and long-term] investing.

After all, I’ve been doing this for nearly 10 years, have completed thousands of Stock Selection Guides (Stock Studies) and belong to a few investment clubs.

Kelvin Boston, in his remarks presented at Congress 2001, urged NAIC to realize that we have a responsibility to remind people that they need not be afraid to be millionaires. No fear. Thirty bright-eyed youngsters changed my outlook.

Captured by a Captive Audience

My audience ranged in age from 9 to 16. A group of seven boys and girls near the front row belong to the [Ujamaa] investment club. It was early on a Saturday morning.

Clearly, some of their friends were doing something else in places some of these kids wished they’d rather be. Others weren’t sure. “Who’s here because they want to be here?” A few arms bent at the elbow and hands were raised at half-mast. All of the investment club members raised their hands, perhaps a little higher than their cohorts. “OK. Who’s here because some adult has forced you to be here?” Another 10 hands go up. All the way up, with feeling. Beads of sweat formed on the back of my neck. I took a deep breath. I reminded myself that they can smell fear. It didn’t help.

“Wow. Who believes that no matter what I do or say that you’re going to be bored out of your skull and that you’ve already wasted a beautiful Saturday?” Three girls at the back, on the far right, nearly stood up.

I didn’t have a chance. Or did I? As the sweat found it’s way to my forehead, these three girls volunteered to become my teammates in a stock-picking game.

Of Movies, Camaros and Hawaii

I tried to remember what $20 a month was like when I was 9 years old. I had a paper route and did some odd jobs. In hindsight, it seems like a mountain of cash. One of the three grumbling girls reminded me that they spend $10 a week to go to a movie nearly every weekend — and that doesn’t cover the popcorn. A young man in the front row talked of how $20 a month now might grow to fund a car payment by the time he’s 16.

No fear. They are clearly NOT afraid.

The beads disappeared. I smiled. How do we know it’s possible? I shared the story of our incomparable chairman, Tom O’Hara, and $20 a month since 1948. We know it’s possible to achieve an annualized rate of return of 13.2% over 50 or 60 years. He’s done it. And he openly admits that other NAIC investors have done even better.

We divided into three stock-picking teams: the Good, the Bad and the Ugly. The three grumbling girls and I became the “Uglies.” A list of long-term companies from Fortune was provided to the teams. We discussed the companies and the youngsters tried to pick the long-term leaders.

My Teacher’s Guide had the 40-year rates of return. The accompanying chart illustrates the selections and the results of investing $20 a month at these rates of return.

The three grumbling girls picked all the stocks. Kudos to the Chicago South volunteers, these youngsters and their parents. Invest regularly. No fear. Listen for the cadence and march to the drumbeat of regular monthly investing.

This column originally appeared in Better Investing, July 2002. The theme is timeless and ever important …

2 thoughts on “Listen For The Cadence

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