Thursday, October 20, 2011
I told him about how many large companies started out as small mom-and-pop's - like McDonald's, Apple, and Dell, and how these entrepreneurs raised money by going public and selling shares. And when you own stock, you actually own a small piece of the companies in which you have invested. We also talked about how investors share in the profits, losses, assets, liabilities, and even decisions of the company. It was a great father-son discussion about the wonders and beauty of Capitalism.
We then studied some charts and reports from Investors Business Daily, my favorite source of investment wisdom. He then settled on deciding the first 2 stocks he would buy with the savings I had set aside for him over the years - just as my father had done. I bought Virginia Electric & Power Company (VEPCO) when I was a kid, and between the dividends and steady increases, I had doubled my investment within a few years. Seth picked Apple (3 shares) and Dollar Tree (10). We placed limit orders last night, which executed this morning. So he's now a stockholder.
This afternoon, after school, he texted me... "The stock market did horrible today." I checked. Dow was up 37. But AAPL was down $3.31 (0.83%) and DLTR down $0.20 (0.25%). Guess it's all about perspective... He lost nearly $12 his first day in the market. Let's hope the other days are better.