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YOUR MONEY: This Silicon Valley stock broker is wise beyond his years

SAN JOSE, Calif. - In these troubled economic times, I've been listening to San Jose stock broker Andrew Yeh. He strikes me as wise, sensible, someone who's keeping his head as those around him lose theirs. (Not to mention their shirts.) "I'm not...

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SAN JOSE, Calif. - In these troubled economic times, I've been listening to San Jose stock broker Andrew Yeh.

He strikes me as wise, sensible, someone who's keeping his head as those around him lose theirs. (Not to mention their shirts.)

"I'm not going to sell mine," he says of his stock holdings. "I'm not going to buy any more, either."

Yeh seems unshaken by the worst market he's seen in all his years.

All 13 of them.


Yep, the kid is 13 years old, and apparently the youngest person to become a broker licensed to trade stocks, bonds, options and other securities on behalf of others. A couple of months ago, at age 12, Andrew passed the Financial Industry Regulatory Authority's 250-question Series 7 test on his first try.

"I can work in the industry," Andrew says, sitting in his West San Jose home. "But nobody is going to hire me." Who's going to trust a 13-year-old with their life savings, he asks?

Hey, I tell him, you couldn't do much worse than the grown-ups many investors have trusted with their life savings. But then there are those pesky child-labor laws.

Andrew already manages his mother's $45,000 retirement account, and his 8-year-old sister, Aurora, is trying to wrest her college account from her father.

"She keeps wanting to transfer the money to Andrew," says Jeff Yeh, Andrew's father.

The Financial Industry Regulatory Authority doesn't track brokers by age, but a spokesman there said no one with the agency was aware of any other 12-year-olds even taking the test, let alone passing it.

I know. You can't imagine why a kid would want to take a grueling six-hour test on collateralized mortgage obligations and puts and stops and the like when there is so much MTV to watch. Maybe you can't imagine what it's like to be 12, either.

Twelve-year-olds get ideas - unshakable ideas. They have not lived long enough to learn that you actually can't be whatever you want to be. And Andrew had something to prove to himself and others who might not believe that he, at age 10, started managing his own college fund and was doing pretty well until recently.


"Even if I grow my portfolio," Andrew says, "they'll say my dad did it."

So last summer he picked up a 4-inch-thick test prep book and an instructional CD-ROM and spent his days studying.

Yes, Andrew is a sharp eighth-grader. He skipped third grade and he gets A's and B's at Harwood Challenger School. In his spare time he competes in chess tournaments and solves complex math problems in his head.

So maybe it's no surprise he scored an 88 on the test, which requires a 70 percent to pass.

There were a few catches when it came to taking the test. First, Andrew's mother, Inder Peng, explains, the regulatory authority asks for a 10-year work history as part of a background check.

"Ten years ago he was a baby," Peng says. "So I put he was with the nanny." From there, she says, he went to AppleSeed Montessori School, so she included that.

Oh, and regulators require that test-takers be affiliated with a securities firm. So Andrew got a San Jose broker he met at a seminar to sponsor him.

Andrew has not been immune from the market's collapse. He says he's held half his $9,000 portfolio in cash. Still, he's down 20 percent for the year and his stocks are down 40 percent or so, he says.


But there are bright spots. His holdings saw some improvement recently, he says, "because one of my companies received preferential tax treatment." And he sees good things ahead for his struggling stock in SORL, a Chinese auto parts company.

"It has more cash in investments than their total debt. Also, the tire business in China has grown like 28 percent."

And the downturn, he says with the wisdom of his years, will not last forever.

"I think stocks will go back up."

Andrew can wait. After all, he's in it for the long haul.


Sample questions:

1. A customer has a short margin account with a short market value of $22,000, a credit balance of $42,000 and SMA of $500. What is the equity in the account?

A) $500

B) $20,000

C) $20,500

D) $37,000

Correct answer is B: The equity in a short margin account is equal to the credit balance minus the short market value. SMA is not used when computing equity.

2. Assuming all of the following bonds from the same issuer are callable now, which one would most likely get called first?

A) 8 percent maturing 1-15-2016

B) 8 percent maturing 1-15-2007

C) 4 percent maturing 1-15-2012

D) 4 percent maturing 1-15-2007

Correct answer is A: Bonds with the highest coupon rates and longest maturity would be the first to most likely get called.

3. Customers who engage in increased activity of wiring money from their account could indicate which of the following activities?

A) Interpositioning

B) Churning

C) Crossing

D) Money laundering

Correct answer is D: Potential money laundering activities include excessive wiring of money between accounts.

Source: Global Career Schools online training program;

(Cassidy is a technology columnist for the San Jose Mercury News. Read his Loose Ends blog at and contact him at or (408) 920-5536.)

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