Did Smart Money Magazine Rebuff the Next Warren Buffett?

In the September 2007 issue, Smart Money Magazine reprinted a letter it received from Mike Price. Mr. Price hails from Salt Lake City and had a question for Smart Money. He wanted to know if it was appropriate to commingle his personal funds with that of his investing clients. The easy answer to the question was no, it’s not appropriate, and you’re wondering what’s so special about Mr. Price and his question. Well, here it is–he is 16. And his clients? They are his relatives who have enough confidence in his investing prowess to entrust him with their hard earned money. And what encouragement or direction did Smart Money Magazine give him? None. Nada. Zip. Instead, they told him that in this down market, he’d be better off going on a date:

Granted, if your services are free and your investors are willing to give you the money (meaning they can’t seek damages should you blow it), you can probably put the funds into a small account legally overseen by a guardian without the government busting down your bedroom door. But in the event of a market downturn, you may just find dating a far more enjoyable pursuit.

And all this time I thought a down market was a buying opportunity, not a dating opportunity. In fact, my prime dating years were during a robust bull market, so I guess I was lucky to have dated at all. But what is particularly disheartening about Smart Money Magazine’s dismissive attitude toward Mike’s interest in investing is that so few young people have any interest in saving or investing. When we do find one, shouldn’t we encourage him or her to continue their pursuits?

I recently read Buffett: The Making of an American Capitalist, a great book that included much about Mr. Buffett’s younger years. Let’s just say he has been a capitalist since long before his 16th birthday. I can’t say for sure, but I bet his advice to Mike would have been a lot different than Smart Money’s. As Buffet has said, “I always knew I was going to be rich. I don’t think I ever doubted it for a minute.” And I think he would tell Mike to continue pursuing his interest in investing, to work hard, learn everything he can, and to buy (not date) in down markets.

In the final analysis, my advice to Smart Money Magazine is this–Grow up!