Teaching Wharton a thing or two

Douglas Sherrets is not the typical Wharton freshman. Sherrets could possibly be considered the next Bill Gates, combining his knowledge of the market with a strong business sense to create a Web site and an approach to stock simulation. And according to Sherrets' mother, Julie, his interest in business is nothing new. "Doug's entrepreneurial adventures began in the summer between seventh and eighth grade," she says. "He did not want to sit around the house all summer watching TV. He wanted to be productive and make some money." And make money he did. Sherrets created a newspaper entitled The Daily Sherrets, which he promoted in his hometown of Omaha, Neb., and sold for 25 cents per copy or $5 for a summer subscription. Before he knew it, Sherrets was receiving requests from the CEO of a local bank, who asked if he could advertise in The Daily Sherrets, as well as Sherrets' twin sister Jessica, who wanted to promote her babysitting. By the end of the summer, Julie Sherrets explains, "Doug netted $500 from ads and subscriptions, and he vowed his next adventure would be more lucrative." By the summer after the eighth grade, Sherrets said that he'd "buy stocks and psychoanalyze them," which led him to his next financial/business adventure -- with the help of a family friend, Sherrets launched his own Web site in 1998 called MrMarkets.com. The site -- which received press from publications including Forbes Magazine and gets about 500 visitors every day -- lists his top choices of stocks to buy and avoid and features a chat room to discuss the market. But it didn't stop there -- he continued to buy and resell Internet domains for tens of thousands of dollars each, and then applied his experience with computers and the stock market to ultimately create an award-winning approach to stock simulation. According to Michael Hoffman, the president of the Wharton Society of Options Traders, "The University of Pennsylvania needs to know more about [Sherrets] and what he has done to make over $400,000 [over 300 percent return in three months] during a recession." In order to achieve such a noteworthy return rate on his stock simulations, Sherrets has created two different approaches to the purchase of stocks. First, there is the popular approach known as "emblematic picking," which, according to Sherrets, involves simply "pulling out a newspaper and buying stocks based on information" gathered. But he says a better way of picking stocks is his second approach, or "enlightened picking," which involves several key areas, such as "constant research to develop a feel for the market, psychoanalyzing people in the market to look down the road and see what they are thinking, watching momentum shifts of the market and finally investigating fundamentals such as news, cash, investors and the Web site" of the company on the market. Sherrets adds that all involved in the market should "be an enlightened picker, take advantage of the short term and capitalize on investor instincts." Then one can "take [his] experience with the market and a feel for currency to whatever investment banking firm or wherever [one] ends up." In the long run, Sherrets recommends investing in US Airways bonds, as well as stocks from Level 3 Communications, Digene, Dell and Panera Bread. He considers Panera Bread to "be the least risky of them." While Sherrets does note that the long term is key, he says it doesn't mean "we can't take advantage of the short term." He suggests Print Caf‚ and Blue Rhino, as well as Overstock.com, which he says "is the best one to short -- or bet that the stock is going down -- because it's coming under heavy fire, and there's no competitive advantage." His father Jim notes that "at 18-and-a-half, [Doug] has been through a huge bull market and now a bear market. [It's] great experience for someone his age." Despite the time Sherrets spends keeping up with the stock market, he has proved himself to be very well-rounded. His father adds that he was "editor of the school paper as a senior [and] played four sports" during high school. Now at Penn, Sherrets has moved on -- and not just for monetary gain. According to his friend, College freshman Conor Lamb, "Doug obviously has a great financial mind and is a good friend as well, but I think the sole motivation behind his success at Wharton so far has been attracting women. I mean, this kid is just money with the ladies. I've never seen anything like it." Well, now Penn has seen something like it. And his family and friends say his success will continue. "Doug has always been a risk-taker," his mother said. "Coupled with his determination and drive, he ends up on top."

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