From singers to artists, Cathedral Catholic High School has sported numerous outstanding individuals since its earliest years. Junior Austin Schwab stands out with his knack for economics and finance. He recently appeared on the national television news show Fast Money on CNBC where he was interviewed regarding his involvement in trading securities. Just how is a high school student selected to appear on a well-known national television news show? Schwab explained that he was contacted by CNBC through the Leaders Investment Club, of which he is a co-founder, when the cable news show was interested in hosting a weeklong segment Teen Traders. He has been featured in other media outlets, such as Business Insider and Techcrunch, but this was his first time appearing on live television.
Schwab has been investing and trading in securities for the majority of his life. When he was just nine years old, Austin’s Dad introduced him to the basics of trading securities – from that point, Schwab developed a passion for the financial markets and began value-investing in technology stocks. He then went on to teach himself about technical and fundamental analysis, essentially learning about the nature of price movement. Austin said that his Dad “has been very supportive, and his advice continues to be of utmost importance for me to reach my full potential.”
Over the years Schwab has been involved in a plethora of businesses, and economics was always an underlying passion for him. In 2012, he co-founded a web start-up venture called Reserverr.com, a free online service that automatically books reservations at restaurants, hotels, and the like. The web application has grown to over 6,000 active users with five employees stationed across the globe. It was the founding of this venture that led this young entrepreneur to begin thinking about how businesses are impacted by events around the world, eventually leading to his quest to learn about global macroeconomics, the strategy he currently employs when he makes decisions about which stocks to buy and sell.
According to Schwab, “The process of trading stocks can vary based on an individual’s strategy.” He actively uses the following methods to gauge an opportunity in the markets: first, macroeconomic brainstorming (Determine economic situations and make prognostications of potential outcomes); second, sentiment analysis (Determine how traders are positioned); third, statistical models & historical correlations (Determine patterns). Once he identifies trades that will offer the ideal risk versus reward, Schwab pinpoints price levels at which to buy or sell a security.
Because U.S. markets operate during the normal business day, Austin finds time to trade during school. Afterwards, he trades the Asian session. He actively manages his positions and makes any necessary changes based on news or a change in prices. Since Schwab cannot always be near a computer throughout the day, he adheres to strict risk management using a “technical stop loss” which automatically triggers the purchase or sale of a security at a minimum and specific price level set by Austin to prevent against unexpected losses.
Schwab and some of his young colleagues started Leaders Investment Club (a global community of traders, investors, and entrepreneurs with a like-minded spirit to engage and exchange ideas pertaining to today’s financial markets) nearly a year ago when they identified a great discrepancy of knowledge regarding basic financial concepts among young adults. The club’s mission is to harness the voices of network members about their financial situations and use the online platform to promote financial literacy. It currently has over 1,500 users that utilize its educational portal. Instead of sharing financial capital, club members share intellectual capital – that is, they share ultimate think-tank. Leaders Investment Club currently has 70 active leading contributing members throughout the world including the US, Canada, United Kingdom, Malaysia, Indonesia, Belgium, Germany, UK, and Switzerland.
Schwab offered his advice to students who are interested in learning how to buy and sell stocks: “The first thing I would recommend to anyone new to investing is to open a paper trading account and test out the waters before risking any real money. Leaders Investment Club (which can be found at LeadersInvestmentClub.com) is a great resource for new investors to learn about different investing styles and determine the one that fits their personality and risk appetite.”
Schwab left young entrepreneurs with a final piece of wisdom: “The thing about investing is that you are always learning no matter how old you are.”
Follow Austin Schwab’s Leaders Investment Club here and take a look at what it’s like to be an aspiring businessman. Also, check out his live interview with CNBC here.
