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July, 2013


Recently my mom reminded me how much fun my dad, who never earned more than $600 a month while working, used to have investing in stocks, margined to the hilt, so he could run the portfolio up to several millions of dollars while the bull continued its run. Shortly after I had opened my first brokerage account, I tried the same kind of thing, swelling my and my wife's assets up to about 180% of our net worth. Boy was that cool! Of course, just as would periodically occur with Dad and Mom's nest egg, a few weeks later the bottom fell out of the market, in the Crash of 1987, and overnight we lost a bundle.

In researching this issue's essay on Joseph Kennedy, Jr., I learned that his father, Joseph Kennedy, Sr., had become wealthy via big bets that paid off so well that he lost nothing during the Crash of 1929. Now that is how to play the investing game!

He was not always so fortunate, of course, and lost big time in other ways, for example, while this nation's ambassador to Britain, betting for Hitler and against Churchill, not the best way to endear America to her allies.

No, the type of "money game" I mean is one in which it is possible to get into investing for fun, yet without losing a dime or making any enemies. Reading neat books on investing can be one way. Here are three I can recommend, the last of them cited recently by a friend:

The Intelligent Investor, by Benjamin Graham;

The Money Masters, by John Train;

Hedge Fund Market Wizards, by Jack Schwager.

A word of caution, though: If tempted on perusing these tomes to rush out and plunk down lots of hard-earned cash on some of the techniques described here, hold up! First, take a long walk, call a friend, count to a million, pinch yourself a few dozen times, or ask someone you trust to hide your checkbook and credit cards from you for a few weeks till you regain your senses.

Yes, one can make money at methods discussed in one or another of these books, yet a person can also lose money faster than at Monte Carlo. So, it is well to keep one's bets and risks small at first, till really knowing how the game is played. Hopefully one won't need to learn the way my dad and I did 26 years ago.

Another fun manner of play in the investing world is with fake money. One of most popular means is the old game of Monopoly, great amusement when I was growing up, still a favorite today.

Recently there are a variety of alternatives geared to the stock market. Here are a few:

  1. Wall Street Magnate;

  2. How the Market Works;

  3. Young Money Stock Market Game;

  4. Wall Street Survivor;

  5. UpDown.

One can also use investing sites such as Yahoo to just construct and monitor hypothetical investment portfolios. Why not start yourself off with $10,000,000 in pretend assets and use it to try out an investment method, comparing your own results with those of the major market indexes? If you are a big winner over a reasonably long time and a complete market cycle (with bullish plus bearish periods), maybe you are ready to test out your Wall Street acumen with actual funds.

I have not yet tried it, but this site looks intriguing as well: Fupa. It offers multiple free investing games. As will be seen when glancing over that web location, investing games can be found that are geared for even quite young age levels. Maybe your three-year-old will learn how to be the next Warren Buffett!

Or try your hand (and mind) at analyzing stocks and beating the market with your picks via The Motley Fool CAPS Community.

All of these books, games, and sites will be worthwhile if they help us have a little fun and prepare us to play the investing game (one I am still learning!) successfully and with real money. Good luck!


Larry is not a professional. Don't take him seriously!

Actually, the investment article provided here is for general information only and should not be considered as professional advice, a solicitation to buy or sell any security, or the Word of God. Investors are encouraged to do their own research while considering their personal goals and circumstances, or consult their own professional financial advisors, before making investment decisions. Neither Larry nor LARVALBUG will be liable for any losses sustained by any visitor to this site.

(Disclosure statement: Larry and Val have holdings in some of the suggested assets but do not "make a market" in any of them and do not derive any direct benefit from recommending them, except perhaps for a bit of smug self-satisfaction.)

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