Scout's honour: a humourous look at a disturbing new trend in corporate sponsorship - Girl Scouts and Boy Scouts in Canada eligible to receive badge for investing - Brief Article

For today's youth, born into an age of online trading, building campfires and practicing first aid no longer makes the heart sing. So Canada's 200,000 boy and girl scouts can now earn a badge in "investing." The new badge was unveiled this week by the Chair of the Ontario Securities Commission. It features a large gold dollar sign emblazoned on a white background, with a dark green border. To earn it, a scout must demonstrate knowledge of the stock market by tracking a company's share price, explaining compound interest, or performing some other simple investment-related task.

Forgive me, but the prospect of these earnest kids running off to play in the market seems too reminiscent of lambs heading off to slaughter. The stock market is not a place where you stop to help a little old lady cross the street. The stock market is where you convince that little old lady to give you her life savings, which you then invest in a highly speculative technology start-up. If that company should fail and her savings are never seen again, then you help the little old lady - not to cross the street, but to read the fine print at the bottom of her prospectus (the part that says "returns can fluctuate").

Sending these youths into the market armed with nothing more than stock tables and an appreciation for the magic of compound interest, is like sending a city kid into the northern wilderness with nothing more than a Swiss army knife and a compass: they'll be eaten by the bears before you can say "derivative."

If Scout leaders really want to teach financial survival skills to a new generation, they need a much more hard-nosed approach. Their young charges will never make a decent dollar if they wander into the market behaving like - well, like boy scouts. They have to know the real tricks of the trade.

Here are badges that would help today's Scouts to trade with the pros, and live to tell about it:

Bre-X Badge

Description: Khaki background, dark green border, featuring a pirate's treasure map with a prominent black X.

Assignment: The Scout must register a claim on a randomly selected parcel of land in the Northwest Territories or on a remote Third World island. By circulating fake gold assay results, the scout arouses intense worldwide interest in the property before selling out to the highest bidder.

Insider Trading Badge

Description: A series of vertical black bars imposed on a light gray background, with a black border.

Assignment: The Scout must loiter surreptitiously in coffee shops located near to the head offices of selected Canadian technology firms (such as Corel or Nortel Networks). Based on overheard gossip about upcoming corporate developments, the scout structures a short selling position that generates maximum return - while successfully evading phone calls from OSC investigators.

Dot-Com Badge

Description: Coat of arms featuring a silicon chip in the top left corner, a stock option certificate in the top right, and an aerial view of the San Fernando valley across the bottom.

Assignment: The Scout registers a web-site with a futuristic-sounding name, and posts details of an imaginary breakthrough in wireless switching technology. By participating in internet chat rooms and other venues, the Scout generates worldwide excitement in the invention. Using photocopied stock certificates, the scout must merge their company with any NASDAQ-listed corporation. If the new partner discovers the invention is worthless and writes off the whole value of the merger, the Scout is instructed to repeat the following phrase 50 times: "It's just goodwill; it isn't real money. It's just goodwill; it isn't real money."

62-Cent Badge

Description: Similar to the original "investing" badge, with a gold dollar sign on a white background - except that just over one-third of the dollar sign is missing.

Assignment: The Scout must write a short essay explaining why the low value of the loonie reflects a national lack of intestinal fortitude, and arguing that any one of several right-wing policy measures (such as eliminating deficits, cutting taxes, or allowing Conrad Black back into the country) would boost the currency. The Scout must then write a second essay explaining why the selected policy measure did not boost the currency, and arguing instead that some additional right-wing policy measure will really boost the currency, this time for sure.

Creative Disclosure Badge

Description: Taupe background with a mustard border, featuring the silhouette of an oil rig.

Assignment: The Scout is instructed to take $20 of their allowance, and structure an imaginary balance sheet which converts that $20 into a leveraged asset base of at least $1 billion, through the liberal use of debt swaps and other unreported transactions. A special gold-embossed version of the badge is awarded if the Scout can convince a senior partner in any well-known accounting firm to certify the validity of the balance sheet.

The Toronto Dominion bank is a leading sponsor of Scouts Canada. This may or may not have anything to do with the organization's rush to make mutual fund customers of its young members. But there are plenty of other corporate executives with experience in the preceding investment skills, and I'm sure they could be recruited as Scouts Canada sponsors, too - once they get out of jail.

Jim Stanford is an economist with the Canadian Auto Workers.

COPYRIGHT 2002 Briarpatch, Inc.
COPYRIGHT 2002 Gale Group