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Wall Street High

These teens, drawing on the lessons of their parents and a bit of youthful bravado, don't fear a bear market.


The midday report from Wall Street was mixed, an electronic hieroglyph of ambiguous numbers and anxious voices. Had the late, lamented bull market suddenly roared back to life? Or was the bear just taking a breather before slouching back in search of fresh meat?

Joseph Shaposhnik, as usual, was unperturbed. Amid the scuffling of Nikes and the crunch of Doritos, the Chatsworth High School senior hastened to reassure his fellow stock club investors that the sky wasn't falling. Not yet, anyhow. Not so long as the Fed kept lowering interest rates and the anti-tax-cut herd in Congress didn't do anything dumb.

"We [need] positive news on the earnings front," Shaposhnik, 17, the club's founder and president, intoned in calm, CEO-esque cadences to the dozen students clustered in Room E-29 for their weekly powwow. "We also need to see an end of out-flows in mutual funds. And we'd like to see a more aggressive Fed."

As free-market battle cries go, it wasn't exactly Gordon Gekko's "greed is good." But Shaposhnik's up-tempo PowerPoint presentation was music to his peers. While politicians quiver and pundits stammer over Wall Street's swoon, one group of investors seems to be taking the gloomy fiscal news rather well: young people, at least in certain sanguine pockets of Southern California.

For Chatsworth's student stock club--several of whose members hail from totalitarian regimes where entrepreneurship is a four-letter word--the market's recent downward spiral wasn't really discouraging. Or so they claimed. Yeah, like most red-blooded Americans they'd prefer to see their investments go up.

But their eyes are fixed on the long-term prize: college tuition, first car payments, a comfortable future lifestyle. Knowing they're in the market for the long haul, not the short gain, they project themselves into prosperity. "I knew nothing about stocks, and to me it's the only way to become a millionaire," said Kim Nguyen, 17, when asked why she'd joined the stock club.

Shaposhnik, a witty and self-possessed young man, says he gradually has parlayed $3,000 in bar mitzvah gifts into investments worth roughly four times that much--even though the amount has shrunk lately as stocks have fallen. Not all high school students are so lucky. Yet, cushioned by youthful optimism, many young investors perceive Wall Street's current troubles only as a distant rumble. Unlike their baby boomer parents, obsessed with the minute fibrillations of an economy that grows younger and faster every week, kid investors may be less subject to impulse trading and market envy. Time, they believe, is still on their side.

"I don't really worry, because it seems like [the stock market] fluctuates all the time," says Evan Abrams, 17, a senior at private Campbell Hall School in North Hollywood, who has kept a stock portfolio since receiving shares of Disney and other blue-chip commodities for his bar mitzvah.

Abrams' experience isn't unusual: Nearly one-third of U.S. children ages 12 to 18 now own stocks, bonds or mutual funds, according to one recent survey. "These kids are much more sophisticated than what I was like when I was a senior," says Jennifer Tabbush, a former investment banker who taught a course on the stock market at Campbell Hall last year. "I remember being insulated from what was going on in the world. I think the media gets to these kids earlier. They know about the stocks, they know about the brands, they have cell phones, they have pagers."

Jackie Stein, 18, one of Tabbush's former students and now a USC freshman, says what's been happening lately on Wall Street is "scary." But she believes this is no time for hysterics. "The one thing that people need to understand is that they can't panic, and the problem with Americans is that they panic."

Not everyone agrees that panic is inappropriate. Polls show many U.S. adults are downcast about the economy, especially those watching their Nasdaq nest eggs shrivel with every CNBC business update. Robert Butterworth, a Los Angeles child psychologist and media commentator, fears the emotional fallout may land heaviest on children and adolescents raised in the fat years of the Bush-Clinton era.

"Because young people have a very short memory and history in their life, this sense of 'irrational exuberance' was more an experience of their current reality," Butterworth says. "Kids growing up, especially younger ones, have a tendency to trust adults and to think adults know what they're doing. I don't think Paine Webber had a little disclaimer. At least cigarette packets have a warning label."

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