EDGE-ucation camp
Since 2013, EdgePoint has been organizing EDGE-ucation camps for the children of our partners. These one-day events are aimed at kids ages 13 to 18 and cover the foundations and importance of investing and building long-term wealth.
The camp has grown every year. As more kids attend these events, we’ve been adding more camps in more cities.
Over the last 2 years, EdgePoint partners have visited 13 cities across Canada to share their knowledge and experience about things that can hurt savings and what people can do to reach their financial goals. Our hope is that with this program we can teach future generations about investing and other concepts that will help foster good future decision-making, financial independence, and self-confidence.
We sent out a survey to see how these lessons have impacted the attendees of the camp. Here are the results.
We were excited to see two campers select “Other” because it means they took the lessons to heart and looked for new ways to apply them. The answers were:
- Opened a savings builder account with a higher interest rate
- Want to buy a stock
Is Your Stock Portfolio A Museum or A Warehouse?
When you apply this crucial lesson to building your stock portfolio, it means that you are likely to succeed as an investor not just by the stocks you own, but also by the ones you don’t.
People buy stocks for all kind of reasons – they like them, their neighbours like them, their friends are making money on them, someone on Twitter is shouting about them, their prices have risen sharply in past few months, someone recommended them on TV, someone wrote about them on online forums, someone is boasting about them on WhatsApp groups, etc.
Often, we end up building warehouses of our portfolios, not curated museums. Some people even maintain multiple portfolios, and each looks like a zoo of mismanaged, rowdy animals. You will do yourself a world of good by saying no to most things and not adding a lot of unwanted stocks to your portfolios. In other words, be a curator of stocks, not a warehouse manager.
Skin in the game matters, especially for riskier, leveraged investment approaches
In Norway, tax returns are publicly available making it possible to collect data on asset managers’ taxable wealth.
Three researchers conducted a study on 120 private equity professionals in Norway. The main objective was to test whether or not co-investment had a meaningful impact on manager choices. The researchers found that managers with more skin in the game tend to select investments with less risky cashflows and took on more debt to finance purchases as their purchases were generally of lower risk. The research suggests that outside investors in private equity funds could incentivize their managers to take less risk by requiring them to invest their own capital.
Over $1 trillion in negative yielding corporates outstanding
Maybe everyone is buying negative yielding bonds because some of them are up 35% YTD...
You don’t make a great museum by putting all the art in the world into a single room. That’s a warehouse. What makes a museum great is the stuff that’s not on the walls. Many items don’t make it to the walls so there is an editing process. There’s a lot more stuff off the walls than on the walls. The stuff on the walls is the best sub-subset of all the possibilities.
When you apply this crucial lesson to building your stock portfolio, it means that you are likely to succeed as an investor not just by the stocks you own, but also by the ones you don’t.
People buy stocks for all kind of reasons – they like them, their neighbours like them, their friends are making money on them, someone on Twitter is shouting about them, their prices have risen sharply in past few months, someone recommended them on TV, someone wrote about them on online forums, someone is boasting about them on WhatsApp groups, etc.
Often, we end up building warehouses of our portfolios, not curated museums. Some people even maintain multiple portfolios, and each looks like a zoo of mismanaged, rowdy animals. You will do yourself a world of good by saying no to most things and not adding a lot of unwanted stocks to your portfolios. In other words, be a curator of stocks, not a warehouse manager.
Skin in the game matters, especially for riskier, leveraged investment approaches
In Norway, tax returns are publicly available making it possible to collect data on asset managers’ taxable wealth.
Three researchers conducted a study on 120 private equity professionals in Norway. The main objective was to test whether or not co-investment had a meaningful impact on manager choices. The researchers found that managers with more skin in the game tend to select investments with less risky cashflows and took on more debt to finance purchases as their purchases were generally of lower risk. The research suggests that outside investors in private equity funds could incentivize their managers to take less risk by requiring them to invest their own capital.
Over $1 trillion in negative yielding corporates outstanding
Maybe everyone is buying negative yielding bonds because some of them are up 35% YTD...
