My 11-year-old's stock picks vs mine: who’s the better investor?

My 11-year-old son, Declan, is already a keen investor. I always talk to him about what dad does for work, and he always peppers me with a million questions; Who did you talk to today? What stocks do they like? How much money do they manage? What's their performance like?

He knows about the power of compounding and he's aware of the concept of delayed gratification - although he hasn't quite grasped it fully just yet. 

He has Vanguard and Betashares kids' accounts – neither of which is a recommendation, although they are very fine products. He also holds a handful of direct investments in companies.

Warren Buffett has long preached the idea of staying within your circle of competence, i.e. investing in what you genuinely understand. And my son, without ever reading a Berkshire letter, has instinctively stayed within his. He knows these brands. He uses their products. He understands why people want them.

So, at risk of being completely pantsed by an 11-year-old, I thought it might be a fun experiment to each nominate 10 stocks within our circle of competence and track their performance over a year to see who comes out on top. There’s nothing on the line, except bragging rights around the dinner table and my pride.

What could go wrong?

Please note that the stocks mentioned below are not meant to be recommendations. This is a fun thought experiment to see which brands resonate with investors of different age brackets. If it encourages you to have a similar conversation with your kids, job done. Always do your own research. Past performance is not a reliable indicator of future return.

The 11-year-old portfolio

1. Nintendo (TYO: 7974 / OTC: NTDOY)

This one is straightforward – my son, like most 11-year-olds, loves video games. He loves nailing me with a red shell in Mario Kart, although he can’t beat me consistently – yet. Oh, and in case you haven’t already figured it out, competition levels are pretty high in the Conway household. 

According to Declan, Nintendo games just feel different and are “fun, every single time”.

2. Roblox (NYSE: RBLX) 

Sticking with the video game theme, Declan tells me that “Roblox is like a giant universe where my friends and I meet after school”. 

They build race cars, houses, and play games inside games. If how many times he has asked me to buy him Robux (the credits used in the Roblox universe, paid for with real money) is anything to go by, even I can see that this one has potential.

3. Ferrari (NYSE: RACE)

I love cars and this rubbed off on Declan. Fast, loud, fun. To be honest, this could have been on my list as well, but I let him have it. I hope I don’t come to regret it. 

Declan’s take: “It’s the coolest car brand in the world, and even people who don’t care about cars know it. Ferraris are special, rare, and people really want them, which is why I think the company will keep doing well”.

4. McDonald’s (NYSE: MCD)

This requires little explanation. Kids love McDonald's, and it’s their first choice when presented with the question, “What would you like for dinner tonight?”

According to Declan, they make the “best fries in the world” – I remain unconvinced – but that alone has him thinking that Maccas “seems like a business that will always make money”. It’s hard to argue against that line of thinking.

5. Disney (NYSE: DIS) 

“Star Wars, Marvel, Pixar - that’s like 80% of my childhood”.

Another profound observation from a budding fund manager. Throw into the mix the enduring allure of the theme parks, and the cash machine that is merchandise, and the investment thesis is clear – even if the Disney share price has had a tough time of things lately.

6. Nike (NYSE: NKE)

Reading the first two companies at the top of the list, you might have been inclined to think that Declan spends all his time attached to a screen. On the contrary, he’s a keen athlete, participating in AFL footy, basketball (dad is coach), and go-kart racing.

Whenever I ask him what brand he wants for basketball shoes or the new footy season, the answer is always the same – Nike.

“Every famous athlete wears Nike, and every kid wants to wear what the pros wear” – enough said.

7. Formula 1 (NASDAQ: FWONK)

As noted above, Declan participates in a driving academy at the local go-kart track and he drags me (kicking and screaming, of course) to the Formula 1 in Melbourne every year.

We also watch Drive to Survive on Netflix, and this investment gets him closer to the action.

8. Mattel (NASDAQ: MAT) 

This one was driven by Declan’s love for Hot Wheels. Every kid has a bucket of them somewhere and if I’m doing the food shopping with the boys (I also have a 5-year-old), they must get a car. Every. Single. Time.

Once I told Declan that Mattel also makes Barbie, he was even more convinced.

“Girls love Barbie as much as I love Hot Wheels – two awesome brands”.

9. Apple (NASDAQ: AAPL)

Great investors have a keen knack for simply looking around and seeing what people are using. Leaning on the trusty “Mark-1 Eyeball”, as my friend Henry Jennings calls it.

According to Declan, “Everyone in my class either has an iPhone or wants one”.

“If a company makes something people can’t live without and keeps making it better, that feels like a company that will just keep winning”.

10. Coca-Cola (NYSE: KO) 

The family recently enjoyed a holiday to Vietnam, and Declan keenly noticed that Coca-Cola was just as popular there as here in Australia.

The kicker for him, however, was that all the ‘local’ drinks (i.e. brands we don’t have in Australia) were also bottled by Coca-Cola.

What followed was a conversation about the Cola wars of the 1980s and the fact that, these days, just about every beverage on the planet is owned and manufactured by either Coke or Pepsi.

Declan’s take: “I like Coke more than Pepsi, and if a company makes something this popular for more than 100 years, and everyone from kids to grandparents drinks it, then that seems like a very safe company to own”.

And the old man's picks

1. Alphabet (NASDAQ: GOOGL)

Dominant in search, expanding in AI, sitting on an ocean of cash. And I use their products every day.

2. Microsoft (NYSE: MSFT)

The enterprise still pays its bills. AI only deepens the moat. Have been using their products since high school.

3. Amazon (NYSE: AMZN)

AWS is the crown jewel. Retail automation provides the upside. Regular shopper on Amazon. My wife would be considered a high-volume shopper.

4. Berkshire Hathaway (NYSE: BRK.B)

Hard not to invest with Warren, even though he’s just stepped down. Compounding, discipline, and downside protection in one wrapper.

5. Visa (NYSE: V)

The world is still moving from cash to digital payments. Visa gets a cut of almost all of it. And I figure if I’m going to get slugged every time I use my card, I might as well benefit from it.

6. ASML (NASDAQ: ASML)

The chokepoint of global semiconductor advancement.

7. LVMH (EPA: MC)

A portfolio of luxury brands backed by unmatched pricing power. Again, my wife’s influence is creeping in here, as well as another big dollop of “if it’s costing me that much, I should get some benefit from it!”

8. Costco (NASDAQ: COST)

High renewal rates and scale advantages make it one of the most dependable compounders. That, and I’m also a massive tight arse.

9. Novo Nordisk (CPH: NOVO-B)

One of the most transformative therapeutic franchises of the decade, and lots of my friends are on the GLP-1s.

10. Transurban (ASX: TCL)

Inflation-linked, stable, long-duration cash flows that anchor a portfolio. Oh, and I hate toll roads and avoid them like the plague. But if I do have to use them, there better be something in it for me. 

Over to you

There you have it, ladies and gentlemen. 10 stock picks pitting an 11-year-old against a 44-year-old, both tasked with investing in the things that they know, and in some cases, love.

See you in a year for the results, but in the meantime, let us know in the comments section if there are any companies in your portfolio that you’ve invested in because you know them intimately, or love the brands they offer.