What the “Teen Wolf of Wallstreet” Teaches Us About Investing

If you haven’t been glued to your television or computer, you may have missed the viral story about the high-school student so unaccountably good at picking stocks that he made $72 million investing before he turned 18. 

News outlets leapt on the story as proof that someone with the right mix of smarts, courage, and can-do spirit can outwit markets and make a killing. It’s a compelling story that draws attention and gets the clicks websites need to keep advertisers happy.

The only problem? The story wasn’t true. The two high schoolers responsible for the ridiculous tale shamefacedly admitted that the story was a complete fabrication. In fact, the two had never invested so much as a dollar in the stock market.

Anyone who had bothered to run the numbers behind the outlandish story would have realized that unless the boys had started with millions of dollars, they would have had to return several hundred percent per year to see the kind of result they were claiming.

There’s obviously a journalism lesson to be had here as well: check your facts. Don’t swallow stories whole. It’s clear that both the journalist and her editors skipped past the fact checking stage in pursuit of a great story.

However, the greater lesson is for investors: there are no magic tricks or secret strategies that will result in riches. Don’t be lured in by the next Bernie Madoff who promises guaranteed returns with no risk. Don’t get sucked by the investing “guru” who promises to teach you the investing secrets of the ultra-rich. There are no secrets.

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