BI > SEPTEMBER 2004

Shareownership in Action

Virginia Youths Attend Intel Shareholders Meeting

It's always a delight to hear from readers who are actively involved in teaching young people about personal finance. As I've said often, America's youths are lacking the knowledge necessary to become adults who have the skills to manage their own financial affairs.

The following article was submitted by Jimmie Jones, director of the nonprofit L.B. Bailey Foundation, which is involved with various business-finance learning opportunities for youth. A main focus is a youth investment club comprising 12 youngsters ages 10 to 16 from the Washington, D.C., area. After earning the money for their airfares and accommodations and diligently studying the subject company, members of this club flew to California to attend Intel Corporation's annual shareholders meeting in May.

The youths were well-received by Intel, which allowed all club members to attend the meeting despite their having only one vote as a unit. Three members were included in a photo with the president of Intel that appeared in a local San Francisco newspaper. We are grateful to Jimmie Jones for sharing this story with our readership and to Intel Corporation for its gracious interest in this youth investment club.

A hot subject for our youth today is saving and investing. Proof of this is the No Limit Investment Club, sponsored by the L.B. Bailey Foundation and located in northern Virginia. The foundation started the club for youths in January 1999, and it has included youngsters up to 16 years old from the Washington, D.C., area.

The group started with five members -- all from the Springfield, Va., area. Membership quickly expanded to include youths from Alexandria, Va.; Prince George's County, Md.; and the District of Columbia.

The members have necessarily spent a substantial amount of time researching company management, operations and stock performance. But they have also gone on field trips to learn about other aspects of business to understand the basic purposes and strategies for saving and investing. Because corporate governance has become a subject unto itself, club members decided last fall to attend an annual shareholders meeting in spring 2004 for one of their stocks. They wanted to learn more firsthand about that aspect of management.

As you might guess, they chose the option farthest away: Intel Corporation, located in Santa Clara, Calif. The club has owned shares in the company since 2000, and despite the decline in technology stocks continues to hold its shares.

The youths found out their decision to go to California was no simple matter. They had to decide how to earn the funds for the travel, hotel stay and food; the cost clearly exceeded the amount in the club bank account.

So they began planning and earning their expenses at the beginning of the year, first with a candy sale in February, then with a walk-a-thon and pizza sale in March and the first of several car washes beginning in April. This was followed by the sale of floral arrangements during Mother's Day weekend in May.

Members found themselves on the brink of departure but still a few dollars short. Foundation volunteer staff loaned the balance of funds needed for the trip -- about a fifth of the total amount. The members plan to repay the loan with funds earned from two planned car washes and a yard sale during the summer.

The youths, accompanied by four adult volunteers, attended the annual meeting in Santa Clara. The meeting proved to be a lengthy one, since several contemporary issues were presented by Intel management and then discussed with several shareholders who spoke from an open mike.

The main topic was a corporate governance change that would affect the way companies record and report stock options. Intel, like other technology companies, has been opposed to stock options expensing and continued to express its opposition at the meeting, which lasted about three hours. The discussion was contentious and passionate at times, but remarkable, too, in that all sides had their say without interruption.

Club members received a tour of the Intel Technology Museum, the largest such museum in the United States. They were also treated to a company-sponsored executive luncheon, during which guest speaker Janice Wilkins, Intel vice president and director of internal audits, reminded the youths to stay focused on their goals and to consider the field of science and technology a fun place to be. (Ms. Wilkins, a graduate of Xavier and Golden Gate universities, was featured in the March 2004 issue of Ebony magazine.)

Members were treated to a tour of San Francisco Bay, where they enjoyed dinner at Fisherman's Wharf. They ended the visit with a tour of Cisco Systems, a sister technology company in Santa Clara, that was also prearranged.

The group then returned to the airport, where they boarded a flight that would arrive at Baltimore, Washington International Airport at midnight. Since they had permission from their respective schools for the trip, and most had homework to do at their hotel sites, they returned to school the same day.

It was a remarkable visit for the youths. They diligently stuck with their fund-raising goals, and with the support of friends and parents overcame that hurdle. They did most of their fund-raising on weekends, so they missed a few Saturdays of leisure activities.

But they all felt it was worth the time and effort to experience some of the business world firsthand. They would never have experienced watching shareownership in action in Santa Clara without a healthy determination to learn more about what they had only been able to read about and imagine for the past four years.

Jeff Fox comments: There's much to learn from this real-life example of teaching the next generation how to get involved in the free enterprise system.

We also can learn from the accommodating response of Intel, which showed significant class in helping to further the education for the youngsters in the No Limit Investment Club. Jimmie Jones of the L.B. Bailey Foundation can be reached at LBBFound22@aol.com. You can also visit the foundation's Web site at www.KidsBiz.org .

Readers interested in sharing their experiences about young investors are invited to telephone or write me at NAIC headquarters or send me e-mail at jefff@better-investing.org.

Jeff is director of educational development for BetterInvesting. Readers interested in sharing their experiences and stories about young investors are invited to contact Jeffery Fox at BetterInvesting or at jefff@better-investing.org