With my kids both on summer break and me decidedly not, I’ve been getting more and more financial questions from them. I’d like to think they’re seeing me monitoring options activity and doing diligent research and it’s prompting more curiosity. But the truth is probably just that they’re at the age where they’re learning how the “adult” world works before they have to strike out on their own.
Either way, I’ve been fielding questions like “How do credit cards work?” and “How do you make money investing in stocks and options?”
I can certainly explain those things to them on paper, (options education is one of my favorite points of emphasis for Cabot Options Traders) but I thought I’d give them a small sum to invest so they can learn the lessons the real world can teach them that trading on paper can’t.
After much deliberation, here are the stocks they bought, the stocks they’d like to buy in the future, and the rationale behind each:
Daughter:
Apple (AAPL) – “The new phone is coming out, and I don’t know a single friend of mine who doesn’t own an iPhone.”
Starbucks (SBUX) – “My friends and I would go there every day if our parents would let us … can we go to Starbucks later this afternoon?!!”
LVMH Moet Hennessy Louis Vuitton (LVMUY) – “This is the company that owns Sephora, which is the makeup/skincare/fragrance company that my friends all buy.”
Son:
Apple (AAPL) – “Do I really need to explain why?” (Aren’t teenagers the best?!!!)
Nike (NKE) – “Everyone buys Nike clothes and shoes.”
I told the kids that we would continue to give them money to invest in the coming months and years, and to come up with a list of other leading candidates for stock buys in the future. Here is that list, and their reasoning …
Daughter:
Elf Brands (ELF) – “Another makeup brand that is hot.”
Lululemon (LULU) – “My favorite clothing brand.” (I can vouch for that, she has sooo many Lululemon shirts/shorts/pants.)
Celsius (CELH) – “All my friends drink Celsius, but I don’t like the flavors.”
Target (TGT) – “I could spend hours at Target. They have everything for reasonable prices.”
Son:
DraftKings (DKNG) – “I see the commercials and the betting looks cool.” (We might be having a gambling conversation.)
Uber (UBER) – “My friends are starting to take rides in Ubers and order food through the app also.”
Capital One (COF) – “You and mom use the Capital One credit card ALL THE TIME.” (He isn’t wrong, unfortunately.)
I had some follow-up questions to these stocks and company ideas but the only interesting/kind of funny exchange went the following way:
Me: What about Facebook/Meta?
Daughter: No one uses Facebook and virtual reality is so mid (translation of mid for those without teens … it’s just ok, and not cool). I would never buy Facebook!
Me: You know Facebook owns Instagram, right?
Daughter: Oh! I would definitely buy Facebook!
Now that you have a look at the inner workings of the teen brain, and what brands are “cool,” let’s take a look at how one hedge fund/institution bet that META stock is going higher this year, via a MASSIVE call buy in early August:
Buyer of 55,000 Meta (META) November 270 Calls for $65 – Stock at 323
This call buy was a $357 million purchase that will lose money if META stock closes below 270 on November expiration. However, the trade has unlimited upside potential should META stock continue its meteoric 2023 run.
In the months to come as my teenagers change their fickle minds about which brands are “so hot” I will update this article so that you are up to date on which brands are “cool.”
