Stock market game winners say:

Investing with "play" money is easier

Teams from Our Lady of Fatima School won the top three spots in the St. Louis middle school region in the spring 2005 Stock Market Game competition. But, kids weren't sure they'd be in the stock market if they were using their own money.

This spring's game competition came at a tough time for the real stock investors on the New York Stock Exchange. During the game's 10-week period, real stocks on the NYSE actually went down.

On Feb. 7, when the kid's game started, the NYSE was at 10,707.19. On April 15, at the end of the game period, the NYSE was at 10,087.51, a decline of nearly 7 per cent.

Therefore, when the three Fatima teams finished their game period with investment portfolios above the $100,000 starting point, that showed good investment success.

Fatima team No. 1 won the St. Louis regions for middle schools with an ending total of $104,609.21, or 4.6 per cent above their starting point. Fatima No. 2 finished at $104,497.13 while Fatima No. 3 finished at $103,341.63.

In regions across the state, there were teams that won their divisions with final investment totals that didn't even finish at their $100,000 starting point.

That brings to mind what famed Missouri author Mark Twain had to say about stock investing in his day. Asked for his investment philosophy, Twain said, "I don't ask for a return on my investment, I just ask that my investment be returned."

Another lesson the Fatima kids learned was they probably didn't know everything they should have know before investing. That even was true for one stock, K-Mart, which was a big winner for the Fatima teams.

Fourteen-year-old Gary Battle said he favored the investment in

(l to r) Alex Francescon and Gary Battle

K-Mart because "it was a big company with lots of stores." At the start of the contest period, the stock had been going up. Gary was a member of the winning No. 1 team.

However, none of the kids knew about K-Mart's past troubles with bankruptcy. And they didn't know that the activity of the stock was being caused by a pending merger with another big, but troubled, retailer Sears.

Fourteen-year-old Alex Francescon said he also liked the K-Mart investment idea but he didn't know those key details of the company's business.

Alex was a member of both the No. 1 and No. 2 teams. Alex said he owns real stocks. But, he added, "My account is managed by my dad."

So, despite the lack of knowledge, the ownership of K-Mart turned out to be the biggest factor in the success of their teams in the state competition.

Most of the kids said they didn't have any real stock investments of their own. And most said they weren't sure they'd want to risk their real money in the stock market.

Some typical responses about what they'd do if they had $100,000 in real money:

(l to r) Kyle Gerringer and Caitlyn Fisch

Thirteen-year-old Caitlyn Fisch: "It's definitely easier to invest when you're using play money, instead of real. If it were my money, I might invest some in stocks but most I'd put in the bank for college." She was a member of the No. 3 team.

Fourteen-year-old Brittany Ashby: "I compare the stock market to gambling, although you can't research gambling. If it were my own money, I'd put it all toward going to the university." She was a member of the No. 1 and No. 2 teams.

Battle: "Investing was easier with play money. If it was my money, I'd probably put it all in the bank."

Brittany Ashby

For the most part, the Fatima kids picked their stocks at the beginning of the contest period and stuck with them. However, there was one exception: Best Buy.

All teams had individual embers select stocks they liked and research them. Then, all the recommended stocks were checked and the final selections were done as a team.

Thirteen-year-old Kyle Gerringer was a member of the No. 3 team. He said the team originally bought stock in Best Buy, the big electronics retailer.

"But, it started to go down and we sold. It was too early in the competition to have a losing stock," he said.

Sherry Whitely is the technology coordinator at Fatima and also sponsor of the Market Game teams. She said she's had teams enter the competition for four years.

"We want to get the students involved in economics during their education," she said.

(If you'd like to know more about the Stock Market game, contact the Missouri Council of Economic Education. There is a regional office at the University of Missouri-St. Louis. The council's statewide website is at www.umkc.edu/mcee.)