Welcome to Firstlinks Edition 415 with weekend update

There is some good news. Many young people entering the investment market have figured out that many "advisers" are selling something so instead are looking for hard facts and education on companies in order to make up their own minds on a prospective investment. Over the last year subscriptions to Simply Wall St quickly roared past the 3,000,000 mark and other similar sites also reportedly blossomed. I personally learned more by participating with the pressure of committing cash than by completing a maths rich Economics degree. I expect most high school students would be better off learning accounting, coding and STEM subjects rather than economics taught by a (probably socialist) teacher with likely minimal investment experience. Depending on what alternative course the students are doing, the decline in Year 12 enrolments may be a good thing.

Hiya Michael You do learn more by putting your arts on the line and see if it gets kicked.However this is a free educational service to teach the bare bones of investing.I like it.If I can pick up one or two things a year it is great. You don't need a degree in maths to solve financial things,but I wish I could do maths,sometimes it is so handy.

Investing is a case of do nothing in my experience.If you are young then if you put $40K into super today and they can grow it at an average of 9% over 32 years then in that period you will have $640K.Rule of 72.

It is very difficult to get people to do nothing, I don't like super,the fees annoy me. However facts are facts. The cost of doing nothing is those fees, I would not do that,I hate it,but for most people it is well worth it,they will have $640K.

They are not trying to cheat you. I sat back and let CBA compound for me since 1991 when it was sold. The govt wasn't trying to cheat me .Everybody I knew would not buy them, they were being sold because the govt was trying to cheat them. They still think the same today.

The rubber hits the road when you spend the money,it is not a case of "they all flock to simply wall street " When I bought those CBA everybody went in the opposite direction,would you not buy them if simply wall street said don't buy them,and everybody agreed. When you look in the mirror that is the person you are fighting,not the people on here .

Put $ 40 K into super,put $ 40k into 1 or two shares that you like,do both.You still have to knuckle down and pay back that 40 or 80 K loan.Leverage terrifies some people and it can cause proplems,I seemed to be able to just knuckle down and pay that money back every month.

I found investing easy,rule of 72 and do nothing,wait for 30 or 40 years.I like the different opinions,it sets me thinking sometimes. I like Roger Montgomery,he sets me thinking.He is 100% correct in what he says about NAB,I bought them decades ago.They were $25 at the turn of the century,they are $25 ( ish) now .However using the DRP that $25K is now $80K.I thought it would be around $150 to $200k.I made the wrong choice,my fault. Roger will make choices,if I buy in and it doesn't work out,it is my fault,not his,I made the wrong choice, it doesn't matter what simply wall street said or advised.

You have to make your own choices and take the blame or the glory for that.I think it is great how he puts himself out there,arts to be kicked.The first time I heard him,what a breath of fresh air, so different to the normal,I was amazed. We both have opinions, time will tell who was right .I hope he turns out to be the new Warren Buffett, I hope they all do, most people need that little bit of coaching/ help.

There is one or two shysters,that does not mean they all are.They all have a product to sell.If that product makes you wealthy it will be the best thing you ever bought,the fees will look ridiculously cheap.You still have to make that choice. The hard facts come from the annual report,the hard facts are sometimes you will be terrified.The education comes from the annual report,and you you thinking for yourself.The education doesn't come from what everybody on Simply wall street agreed on. If I have taken your post the wrong way my apologies.

I enjoyed Graham's piece on Afterpay when he made his $50k I think it was. Simply because I was thinking exactly the same thing, should I pump $15K into this 'lay by' company, something is going on here.

He pulled the trigger on it, I didn't. Some people will say it was luck, others will have other opinions.The facts are still the same, I made the choice,so did he. Well done Graham, I did the wrong thing.

University lecturers are not teaching socialism, that is your opinion.They are teaching a subject.Some of them are teachers,some of them are great and will always be remembered.They made a difficult subject easy ,and somebody that struggled suddenly saw the light. Life works like that.

If you are young then well done for starting young,time will be your best friend and quickly turn into your biggest enemy,not enough of it left .

Don't be afraid when the bad times hit,the experience can teach you a lot.Good luck, it is great fun.

Economics was a great subject and should be made a subject that should be taught up to year ten. It gives the student a good bearing for the future. It doesn't have to be all about shares. The economy re supply and demand of goods and services thus Governments actions. I did economics from year 8 to year 11 at a state school in Queensland.

Paul Coghlan : You remind me so much of the admirable teachers that MY GENERATION had !
There were standards to meet and you had to "lift your game " and succeed , otherwise you failed and were relegated to another area that "stretched you" but that you could actually handle.
[ Not without some soul-searching by one's self and some parental opprobrium though ! ]
But there were none of the cop-outs you describe: as a " course as being “a mile wide and a foot deep”. None of "our stuff" was shallow or "padded" to spare anyone's feelings or self-esteem !
Graham Hand : You , also , were indeed fortunate.

Thanks for your generous comments Trevor. They gladden the heart of an old chalkie! I might add that the class of 1975 at Randwick BHS was one of the most able and appreciative group of students I had the pleasure to teach. Graham, Alex and Anton were the three star scholars who went on to have very successful careers while remaining the same good people they showed as young men.

I also loved Economics and graduated in 1978 in the top 10% of the state (NSW) for the subject. However, when I opened the SMH careers section (this was pre-Seek, actually pre-computers generally), the first 10 were for Accounting roles, there was nothing under Economics except obscure roles in the government. If only I would have had the foresight to know where a degree in Economics could have taken me. It came of age somewhere in the eighties. My niece, 10 years younger did well at school economics and went into the ASX as an equities analyst. The sky was the limit for her career after that.
As to the dying interest, I agree with Graham's suggestion about re-branding but also think the curriculum should not include any Econometrics. That is way too techie to be of interest to teenagers although, it is probably largely run via smart applications rather than page long formulas these days.
The Macro side is a scene setter but the really interesting learning is the micro-economics and this part of the course could include building business plans and other real life type of projects.
Financial literacy is not all that high within the broader community and there are plenty of proponents of basic finances being taught at school. So here's the plan, start off in early high school learning the fundamentals of budgeting, savings principles and the like and graduate each year into more and more economics learning. Setting the base as something that is useful in real life would likely lead onto more sustained interest in the subject which, in my mind, should be compulsory or, at least in a group of subjects that the student has to select to undertake.

Public servant schoolteachers giving investment advice. Now that's a great idea. Karl

Karl, there's a big difference between information/education and investment advice.

Maybe the high drop out rate is not due to mathematics but to students realizing how the way high school economics is taught has little relevance to their everyday lives. Business studies seem a lot more relevant!

Proving your point Keith, this chart (comparing Economics and Business Studies enrolments for NSW students) is quite telling. https://www.rba.gov.au/speeches/2017/images/sp-so-2017-07-29-graph3.gif

As the teacher who taught you Economics at Randwick BHS back in the mid 1970s, I offer a few observations based on teaching the discipline for almost fifty years. Before the introduction of Business Studies, Economics was the most popular Social Science of the HSC offerings. Prior to this, it became apparent at the HSC marking centre that there was an increasingly long tail of students who simply could not attain a reasonable level of economic literacy. For many students and probably some teachers, Economics had become too challenging. Rather than dumb down Economics, the new easier and more descriptive Business Studies course was offered. A fellow teacher described the new course as being “a mile wide and a foot deep”. Students soon flocked to it with many schools actively dissuading less able students from taking Economics. The fact that a diminishing, though more able cohort was studying Economics, meant that it was far more favourably scaled for the UAI was sometimes overlooked by teachers advising students on course offerings in Years 11 & 12. Economics requires teachers to keep up to date with current economic issues and policies and I suspect that a number of teachers found it easier to teach the less intellectually demanding course although in fairness Business Studies can be enlivened by searching out interesting Case Study material to heighten its relevance. A further observation is that with diminishing Economics numbers in the schools, it is the older and more experienced teachers who teach the course leaving younger teachers with fewer opportunities to start teaching the course. Finally, your suggested title for a revised course in HSC Economics is one that make the current PM very proud of you Graham. I might add that he studied Geography rather than Economics when at my alma mater Sydney BHS.

Hi Paul, thanks for the comment, and thanks for helping me on the way into economics and then banking and finance and wealth management and investing and capital markets and all the interesting things economics can lead to.

Graham, I also add that the second part of this podcast includes an interesting discussion on the declining HSC Economics candidature. Cheers, Paul
https://www.abc.net.au/radionational/programs/the-economists/rename/13437000