The Stock Market Game

St. Gabriel's teams find unique approach

One standard rule for stock market investment calls for holding a diversified portfolio to spread the investment risk. Another is to not put too much of your money in one stock.

Teams of kids at St. Gabriel's School found success without following those rules.

The team of John McCann and Mitchell Knapp posted the highest gain among St. Louis elementary school teams in the fall Missouri Stock Market Game competition. And classmate Danny Hogan was a one-man team who finished close behind.

Five teams from St. Gabriel's School were among the hundreds of school teams in Missouri who competed in the 10-week contest. The contest is sponsored by the Missouri Center for Economic Education, headquartered at University of Missouri-Kansas City.

All the teams start with $100,000 in play money and compete to see who can increase their portfolio's valuation the most during the contest period. The fall competition ran from Oct.1-Dec. 7. Another game period will be in the spring semester.

The McCann/Knapp team ended with a portfolio valuation of $119,228.68, a 19% gain for the less than 2½-month period. Danny Hogan's portfolio ended at $115,607.43, up more than 15%.

Among St. Louis middle schools, two teams from Hixson Middle School posted the best gains. One Hixson team ended with a portfolio valuation of $124,263.32 and another finished at $120,679.49.

What made these valuations even more impressive was the record of the real stock market during the same period. The Dow Jones 30 Industrial Average (DJIA) declined nearly 2% during the Oct.1-Dec.7 period.

And the DJIA average is made up of 30 of the most substantial companies in the U.S.

The game period was marked with large gains and drops in real stock values. But the kids said they didn't panic during the period of sharp fluctuations in stock market values.

Mitchell Knapp

However, 13-year-old Mitchell Knapp admitted he might have had different feelings "if I was investing my own money."

Ms. Linda Hohenbarger was the advisor for the St. Gabriel "investment club" activities. She's an enrichment teacher at St. Gabriel's.

To start the SMG segment, Ms. Hohenbarger asked her husband, Fred, to give the kids some insight into stock investing. He's a former engineer who's made a study of the stock market since his retirement.

After a back grounding in investing, the kids set out to research possible stock choices.

Danny Hogan

Fourteen-year-old Danny Hogan said he "Googled" individual stocks for basic information. Then, he went to Big Charts.com for more information, including past financial results for up to 10 years.

Twelve-year-old John McCann said the researching the stocks on the Internet was the thing he liked best about the Stock Market Game.

When it came to investing, both teams put more than half of their $100,000 investment pool in one stock, ISRG. The company manufactures equipment for the health industry.

John McCann

Putting so much money in one stock is generally a "no-no." But, in this case it worked.

More than 80% of the McCann/Knapp portfolio gain came from ISRG. And, more than 100% of Hogan's net investment gain came from ISRG.

The only other investment to show a significant gain for the teams was Apple Computer.

Each portfolio had six stocks. Fortunately, none of those other stocks had any big losses.

Danny Hogan said one of his first stock purchases was in the company that makes quirky, but popular, Crocs footwear. But, after the stock dropped, he sold it after two weeks.

The McCann/Knapp team also had some early losers. They originally bought McDonald, the fast food firm, and Hilton Hotels. But, they dumped those early after some losses.

Even with ISRG, the teams had some uneasy moments. After gaining strongly early in the contest period, the stock dropped. But, in the end, it recovered to post a large gain. It was the making of both of the teams' final ranking.

Mitchell Knapp said he liked the Stock Market Game because "I like to compete." Results for each of the SMG teams were updated at the end of each day and could be checked at http://cas.umkc.edu/mcee.

Danny Hogan said, "The Stock Market Game seemed so real. It gave me experience so I'll know what to do when I'm investing my own money."