Vol. 20, No. 18

July 19, 2001

Stock Market Game attracts budding entrepreneurs

Stock market players (from left) Amy Sheth, Coleen McCarren and David McCarren receive help from Arlene Hitchens.

Investing in the stock market, with its daily ups and downs, is enough to bring even the most seasoned broker or day trader to the brink of distraction. Imagine then, what it must be like for students from grades four through 12 to navigate the sometimes stormy seas of high finance in the hopes of making a reasonable profit while learning valuable lessons about the American economic system and the global economy.?

Since 1977, the Stock Market Game (SMG), sponsored by the Securities Industry Foundation for Economic Education (SIFEE), has done just that–by offering participants the experience of a simulated investment situation–complete with all the risks and rewards associated with decision-making where large sums of money are involved.

The First State version of SMG, offered each spring and fall since 1983 by the Delaware Center for Economic Education and Entrepreneurship in the College of Business and Economics, has proven increasingly popular among students and teachers.

This summer for the first time a special version of the game is being offered by the center for students and their parents, according to Arlene Hitchens, Center for Economic Development and SMG program coordinator.

"This is a wonderful game, so why not get the community involved?" Hitchens asked. "This summer we decided to target the adult population as well, and the response has been terrific."

Evidence of this popularity could be seen in the overflow crowd of nearly 50 teams gathered in a Smith Hall computing lab on a recent evening to hear Hitchens explain about the resources available to contestants, including a 138-page booklet explaining the rules and mechanics of the game.

Also on hand to help participants to get started on the 10-week course, which will end Aug. 17, was Michael LaHoda, a former teacher and now a broker/dealer for Heather Agency Inc., of Delaware.

"Speaking as a broker, I can tell the participants that there are many resources to draw on for making informed decisions," LaHoda said. "As a teacher, I see this as a chance to give children a real life experience in problem solving. If they can do this, the course has real value to them."

According to SMG rules, competing teams–which have as many as six players–each get a hypothetical $100,000–to invest on the New York and American stock exchanges and NASDAQ.

Contestants can borrow additional funds, depending on their account equity, for a weekly charge on negative cash balances at an annual rate of 7 percent. Teams also are credited weekly with a 5 percent annual rate of return on positive cash balances.

Rolf Joeger, of Newark teamed up with his son Torsten, who will be going into the eighth grade next fall.

"My son has a small mutual fund, but this does not allow him to deal with individual stocks," Rolf Joerger said. "I thought this would be a nice way of getting that kind of experience."

While Rolf and son Torsten both follow the stock market and have some investment ideas, they said they plan to get additional background information before making any SMG investment decisions.

Another Newark resident, Wayne Jones, along with his son, Brian, became interested in the SMG competition after reading about it UpDate.

"We have been interested in the market ever since we read Rich Kid, Smart Kid and listened to a tape, What My Rich Dad Taught Me About Investing, both by Robert T. Kiyosaki," Wayne Jones said. "We have had some short-term success, and now we want to try some long term investments."

Brian, who is a fourth-grade, home schooled student taught by his dad, shares his father's interest in the market, and both said they believe that many opportunities exist in the volatile high tech stocks traded on the NASDAQ exchange.

"I have been interested in the stock market for about a year now," Brian Jones said. "I have studied many of the stocks, and I would like to start out by investing in some new ones."

So far, this study has been paying handsome dividends, as Brian's team sits at the top of the list of 41 contestants with less than one month remaining in the contest, having realized a profit of $5,231 on the initial $100,000 of investment capital.

This fascination with the market by investors of all ages helps to explain the continuing popularity of SMG competition and how it has become something of an international experience.

In the last two decades, more than 8 million students in the United States and 15 other countries have used SMG to discover the rewards involved in making educated decisions while augmenting computer proficiency and Internet research skills.

For the summer program, there also are prizes, including cash awards of $100, $75 and $50 to the top three finishers, and weekly free coupons to McDonald's, courtesy of Dukart Management Corp.

Local sponsors of SMG of Delaware have included The News Journal, Morgan Stanley Dean Witter, Friess Associates of Delaware, PNC Bank Delaware, First Union Securities, Heather Agency, Merrill Lynch and Wilmington Trust Co.

While adults may be joining the ranks of erstwhile investors during the SMG summer games, the real source of competition continues to come from middle, junior high and high school students.

"A lot of these kids end up being winners," Hitchens said. "After seeing the way they perform, I realized that my colleagues and I could learn a lot from them."

For more information, or to see how contestants are doing in the Summer 2001 Stock Market Game check out the web site at [http://www.udel.edu/cee/ rankings.htm].

-Jerry Rhodes

Photo by KATHY FLICKINGER