The Surprise in Geithner's Portfolio

Government officials often avoid conflicts between professional obligations and personal finances by divesting company stocks from their portfolios. So it comes as a surprise that, along with the standard mutual funds, Treasury Secretary Timothy Geithner owns a small amount of stock in yoga clothing retailer Lululemon.

The Vancouver (B.C.)-based company has attained almost cultlike status with urban women who carry Lululemon's reusable tote bags and assume the lotus position in its pricey workout clothes. The store sells, for example, the $58 "Ta Ta Tamer" sports bra and the $98 "Groove" pants. The Treasury Secretary, a runner and basketball player, has never been known for wearing spandex.

Turns out, he purchased less than $1,000 worth of shares a few years ago to teach his two children about the stock market, press aide Steve Adamske says. Geithner picked the company partly because of his now college-age daughter's interest in yoga—and as a hedge against her frequent Lululemon purchases, Adamske says. Additionally, Geithner owns $1,000 to $15,000 worth of IBM (IBM) stock, which he inherited. (Disclosure forms give values in broad ranges only.)

The Geithners have potential as stockpickers: Since Lululemon's July 2007 initial public offering, the company has posted a 165 percent return. The Standard & Poor's 500-stock index, meanwhile, lost 20 percent in the same period. Still, it hasn't been an easy few years for the retailer, whose share price has fluctuated since the purchase, providing fodder for the family lesson plan.

Like most high-end retailers, Lululemon was hit by the financial crisis and the slowdown in consumer spending. The company's stock trailed the S&P from September 2008 to September 2009, when it took off. This year it's up 59 percent. Says Edward Yruma, an analyst at KeyBanc Capital Markets in New York: "This is good stock to own."

Geithner might want to incorporate some of Lululemon's quirky culture into the kids' lessons. Emblazoned across its shopping bags are manifestos like: "Friends are more important than money." Here's one the chief U.S. economic policymaker may want to avoid: "Do one thing a day that scares you."

The bottom line: Treasury Secretary Geithner is using an investment in a yoga clothier to teach his kids about the stock market.

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