January 2021

Having to home school two supposedly self-sufficient older teenagers (again) has been challenging to say the least, but also very eye-opening.

One of the big lessons I’ve learnt is that social media is ripping up the rule book on financial education in a way which seems unstoppable. As a parent who has been in this industry for over 20 years, I’ve done my best to instil ‘financial wisdom’ in my children. Chores for pocket money, saving up, the benefits of long-term investing and compounding etc.

Recently I’ve been stunned to hear my son (17) shouting at his friends through the X-box about Gamestop and Blackberry, rather than the usual shouted directions and admonishments for getting killed on [whatever game] he normally graces his friends’ ears with.

Since the beginning of January he has been ‘advising’ (read, harassing) me to buy Blackberry shares – “they’re going to rocket, they don’t even make phones any more”, and Gamestop “there’s going to be the biggest short squeeze ever”. For a while I resisted, but his demands got so annoying I decided to go ahead, on the proviso that he can take the equivalent amount in profit, and/or take the financial hit as and when they tank.

My raison d’etre was to teach a tough life lesson, early on, about expectations and basically gambling (and losing).

So I did buy some of both of the above, purely in the spirit of lesson-teaching. So far we’re up on all counts. Do I expect that to last? No.

If the opposite does happen, and they stay up, then I’ll have learnt a lesson, although not as big a lesson than the hedge funds who had shorted GME. I have also learnt that my son was inspired to undertake a lot of research, looking under the bonnet of how hedge funds work, and about different types of derivatives and how they react in various situations to an impressive level. To be fair to him, he has heeded my warnings that there’s no such thing as a guarantee and is prepared to let it play out, come what may.

So there’s an upside to all of this; he was motivated to research something to a very detailed level. In lockdown school life, finding that sort of motivation is a big plus. The dangers, however, are more numerous. As I blogged before back in September 2019 there’s a whole generation out there taking their cues from social media outlets which aren’t regulated; often from ‘influencers’ who know nothing.

Financial education is paramount. Sensible industry players need to engage with young people in a way which will reach them; nothing we haven’t said before and something we discuss at Quill on a regular basis. It seems that lockdown is creating a need for this process to accelerate.

Disclaimer: author owned both shares mentioned at the time of writing (for purely educational purposes!)