Students invest in stocks to grasp understanding of money management

As legend has it, at age 6, billionaire Warren Buffett had already begun to show an aptitude for making money. After purchasing a six-pack of Coca Cola from his grandfather’s grocery store for 25 cents and reselling each can for a nickel, Buffet was able to acquire a 5 cent profit.

As an adult, he developed his value investing philosophy and later became the CEO of Berkshire Hathaway, becoming perhaps the best known investor in history. While age 14 isn’t exactly the same thing as 6, several Saratoga High students seem to be following the same approach as Buffett — start young.

Senior Chris Lee, his brother freshman Julian Lee and freshman Cynthia Zhang all have decided to tackle a particularly precarious form of accumulating an income — investing in the stock market. In addition to the money that they earn, it also helps them learn about money management.

Due to the market’s unpredictable nature, they have experienced both the thrill of success as well as the disappointment of failure.

The Lee brothers have also been very involved with stock market trading, continuing the family business. They represent two ends of spectrum — Chris is a conservative, meticulous investor looking to make safe trades while Julian is a risk taker and searches for the one or two stocks with high growth potential.

Both their parents are well informed about the stock market and were willing to give both their children money to experience the intricacies of the market from a young age.

“A lot of my family is really into investing,” Chris said. “They were supportive in giving us money because they thought that letting us invest would help us develop useful life skills. Money management is a good skill to have because even if you end up making seven figures annually, if you know how to invest it, you can do so much more with your money.”

Chris invests mainly in large and stable corporations such as Amazon, Apple and TSMC (Taiwan Semiconductor). But the money that he has left over, he mainly puts into index funds and other small companies that he finds interesting.

Chris implemented his love for clothes and games into his portfolio by investing a bit of money in Adidas and several up-and-coming gaming companies.

“Amazon has been my best investment,” Chris said, “and it’s just been going up for a while now. I’m usually pretty safe in my investments, so I sometimes lose a little bit but I never really lose too much though.”

By purchasing shares that have been consistently increasing in value, Chris has been able to make fairly accurate predictions. However, with the small amount of risk comes only minimal opportunity for reward. For Chris, this isn’t a big deal; it is an essential component of his strategy. However, his younger brother Julian aims to strike gold with investments.

“My brother likes to play with really risky stocks with small companies, and that stuff can go down really quick. He lost a few hundred [dollars] because of it,” Chris said.

But Julian’s style of investment has its upsides, too. Although most of the stocks he invests in aren’t as stable and have much more risk, they also offer a lot more reward than big companies with steadier prices.

He started off with a MarketWatch stock market simulation game without real money to get a grasp of what he needed to do to succeed and make money. He was able to make $4,000 after starting with $10,000, proving to his parents that he was capable of holding his own.

“My parents are generally really helpful whenever I’m curious about something, and they were willing to give me some money after I had proved that I was able to succeed,” Julian said.

Since then, Julian has invested in numerous tech companies, including Apple and Amazon, as well as EndVid, and an AI company that makes stock market investing easier. His investment in EndVid has been his most profitable yet, earning him $500 since he purchased it.

While the Lee brothers invest in a variety of shares, Zhang has invested solely in Nvidia, primarily because her mother works for the company.

Nvidia, whose share price has shot up from around $20 back in 2015 to $220 today, has been so successful due to its invention of the GPU, or graphics processing unit, which allows for more complex graphical animations in video games and the like.

“I persuaded my parents to buy the stocks, and then they did,” Zhang said. “And then when the stocks dropped, they were planning to sell, but then I did some research and told them not to. They almost did, but then they didn’t, and then the stocks grew like thirty dollars.”