Kindergarten dropout...to day trader

(A guest post by Jesse.)

Josiah got interested in stocks near the end of 2012. He overheard Mama Caz and Pop Pop talking about selling some stocks, and he started peppering them with questions. What’s a stock? How do you make money on it? How do you buy it? How do you sell it? Etc. Then he started in on me with questions when I got home that night. I relented and started showing him some stocks and charts on the computer, focusing on companies he’d know something about.

In February of 2013, Josiah bought his first stock ever. It was 2 shares of Chuck E. Cheese stock (CEC) for $30.73 each. He used his own money he had saved in his bank account from birthdays, holidays, and lemonade stands. We had been watching it for a while while by that point, waiting for the right time to buy, and often he’d say something like, “Dad, CEC is down $0.20 today; (and then in an eager side whisper) do you think we should buy??” We agreed that somewhere around $30-31 would be ideal based on historical price movements. 

After we bought, he watched the price every day (without prompting by me). Each day, he’d ask for my phone, and he knew how to look up the stocks app and find CEC. He’d often look at the one day chart to see what it had done. He would then figure out how much he had made or lost so far by doing the math. After about a month, we agreed to sell at $33 per share. He had also received a dividend during that time, which I paid to him in cash (two quarters, one for each share). In total, he made about an 8% return in about a month. Not bad for his first trade! Krista and I covered the brokerage fee on the condition that when we’re old and he’s rich, he’ll take care of us…    I love that boy!

This picture was taken with my phone while we were visiting Santa Barbara in early March. We were waiting in a pizza restaurant, and Josiah found an Etch-a-Sketch to play with. We were ordering, not paying attention to what he was doing. He suddenly held up the picture he had been working on and said, “Look, it's a chart of Chuck E. Cheese stock!” Krista and I lost it. What have we created?!
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Post-script edit: It's been 12 hours since putting up this blog post, and we're feeling compelled to note that Josiah is still a 6-year-old boy, his education on bid and ask prices, limit orders, and dividend payouts notwithstanding. Jesse took the photo below with his phone today during breakfast. Yep, those are underpants on Josiah's head. As Jesse reflected, maybe he's not ready for Wall Street quite yet....   :)