April 5, 2002
The Canadian Securities Administrators - the
good people who represent Canada's provincial securities commissions
- has convinced Scouts Canada to bring high finance to the campfire.
No more of being stuck with just canoeing,
rubbing two sticks together or making wallets out of leather and
twine. Canada's boys and girls can now earn their "Investing
The idea of the new badge isn't to train a
new generation of Enron investors, eager to plunk down their
retirement money on something as secure as Florida swampland. Quite
the opposite, apparently. The CSA wants to raise a new generation of
financially literate youth, able to see past iffy auditors and
puffed up financial statements to make sound investment choices.
I suppose the badge goes back to the days
when the earliest stock brokers canoed through the forests and
braved the wilderness to create the first mixed asset fund out of
nothing but birch bark and a small ball of string. They were a hardy
breed, those frontier day traders, in their three piece suits and
To get their Investing Badge, Scouts have to
track a stock's price for two weeks, browse the Internet for
investing sites that "cater to children", or evaluate the
risks and rewards of different investment products.
There is no truth to the rumour that the
badges themselves are made out of Nortel shares, which the Scouts
will continue to use to start fires since they're currently cheaper
Let's hope this new-found appreciation for
market capitalism will be used for good and not evil. I don't want
to see a leveraged buy-out of the neighbour's kid's lemonade stand.
Or a hotly contested proxy battle to see who gets to be goalie in a
game of street hockey. Or two kids in a fight making disparaging
remarks about the qualifications of each other's auditor. Or moving
that dollar you borrowed from your sister "off book" to a
judgment-proof offshore subsidiary. The last thing we need is a
generation of pre-teen Gordon Gekkos.
I'd hate to see a document shredder added to
the basic Scout kit of a pocket knife and a compass.
I imagine the talk around the campfire after
a hard day's trekking in the woods could change a bit:
Billy (age 10): "I'm worried that my
portfolio isn't diversified enough."
Johnny: (age 11): "You know William,
there is such a thing as being too diversified. I got caught last
year with no real focus to my investment strategy, and even though
my gainers outpaced my dogs, when I finally pulled the trigger to
crystallize my capital gain to take advantage of my loss
carryforward I got caught in a downdraft and ended up with nowhere
to hide. My tax liability now is bigger than my net realized
Billy: "Tell me about it. I'm about to
liquidate everything and plow it into bonds until the market stops
penalizing risk. These interest rates are killing the world equities
markets. But enough about that - wanna put a bug in Simon's sleeping
For some reason the Girl Guides decided they
wouldn't join the Scouts in adding a new Investing Badge to their
campfire blankets or sashes.
My guess is they've decided to wait until
the Scouts have seen their investments bottom out. That way they
won't stand a chance in a hostile takeover.