This morning, I spent some time with my boys teaching them about the stock market. We do this from time to time and I think its worthwhile, especially if you are involved with markets on a daily basis, so that they gain some understanding of what you do.
I’ve written about this before here and focused on General Mills and Cheerio’s which is a breakfast cereal they eat all the time and so are very familiar with. A note about that piece that I didn’t mention at the time. Kids, even young ones, have the ability, to varying degrees depending on their developmental level, to recognize patterns and so they will get price behavior analysis much better than you might think. You will be surprised. 🙂
This morning we took a look at Disney, which is of natural interest to them too. I bought them each a few shares of the stock and from time to time we take a look to see how its doing.
Disney is a natural for them because they love Mickey Mouse, Lightening McQueen, Spiderman and the like and this morning we focused on 2 areas.
1) Some large companies are made up of multiple businesses and so we looked at Pixar, Marvel and the theme parks.
2) We examined market capitalization as a product of share value times total number of shares. We broke out the calculator and a piece of paper and pencil, and multiplied 64.73 (share price) x 1.8B (shares outstanding) and compared our answer to market cap.
So we got some conglomerate corporate structure and some serious math in which was nice.
Some keys to the process:
1. Choose a company that kids have an interest in. Disney and General Mills are natural choices. Here’s a pic of Max from this morning wearing his Spiderman suit so you know he gets Marvel which is owned by Disney.
2. Join them where they are cognitively. Here’s a simple way to gauge what your kid can and can not understand. If you begin showing them something and they change the subject, they don’t get it so move on. If they ask you a question, then you have them hooked.
3. Buy them a few shares of companies they might be interested in and show them that you have done this in their account. In general, they love this and they might even ask you to look at the price from time to time or even the stock chart if you have shown them this before.
4. Just have fun with it. Everything is play to a kid. So if you play stocks with them, they wll join the game.
5. If you are a commodities trader, introduce them to Cocoa Futures. They probably love chocolate. 🙂
$DIS $GIS $CC_F