Giselle is eleven and has saved €10,000. Her father gives her one piece of advice: “Buy pieces of good companies for less than they are worth. Then let the grass grow.”
Over the next forty years, her neighbor Mr. Market knocks on her door at the moments that matter. One day he is euphoric and asks top dollar; the next he is panicking and puts everything on sale. Together with Giselle, you make nine decisions. In between, we fast-forward the years and you see what your choices have wrecked, or earned.
In the end, what counts is not what Mr. Market thinks of her holdings, but what the businesses are really worth. And above all: her wisdom.
A round takes about ten minutes. Forty years of patience, practiced in ten minutes.
Giselle is real. When she was six, she explained to her grandfather during a sleepover how to value a company. We have been investing together ever since. This game is for her, and for everyone who wants to get to know the quiet path.
The gold line is what Mr. Market offered for Giselle's holdings. The dark line is what they were really worth. The green dashed line is the patient path: all nine choices from the book. The dots are your decisions.
Not ready for the book yet? Leave your email and I'll keep you posted on the English edition and the occasional essay on patient investing.
Mr. Market comes from The Intelligent Investor by Benjamin Graham. In Letting the Grass Grow you meet him in chapter 4, Value versus price; the section “Mr. Market as your servant” begins on page 45.
Mr. Market is a thought experiment by Benjamin Graham, the founding father of value investing and Warren Buffett's teacher. Imagine that you own a share in a business, and that a somewhat manic-depressive business partner knocks on your door every day with a price at which he wants to buy your share or sell you his. One day he is euphoric and quotes ridiculously high prices; the next he sees danger everywhere and puts his holdings on sale. You are free to take him up on his offer, but you owe him nothing. Tomorrow he will simply be back.
The stock market, Graham argued, is precisely this neighbor. In the short run, prices reflect moods, not value. Those who learn to test Mr. Market's prices against what a business is really worth can use his moods instead of being ruled by them: buy when he is gloomy, sit tight when he is euphoric, and otherwise do very little while good businesses grow more valuable year after year.
In this game you practice that skill across an entire investing life. You guide Giselle for forty years, from an eleven-year-old girl with a piggy bank to a wealthy woman in her fifties: ten chapters, nine decisions. Nine times you face a decision real investors face too: a solid company on sale, a hype that seems to be making everyone rich, a crash, a cyclical company at peak earnings, a charismatic executive with big plans. With every decision you get a napkin with the numbers that matter: gross margin, return on invested capital, debt, and a simple value calculation. In between, the game fast-forwards the years and you see what compound growth does for those who own the right businesses, and to those who trade on moods.
The game accompanies Letting the Grass Grow — Long-Term Investing, the book on value investing in the tradition of Graham, Fisher, Buffett, and Munger, written by Duco Blijdenstein and illustrated with paintings by Margreeth Leopold.
This game is intended as a learning tool and is not investment advice. The companies, prices, and events are fictional.