Cairo Association of Teachers - Newsletter

CAT Tracks for November 22, 2006

Make that "buying and selling" stock!

Further evidence of the gap between the "haves" and the "have nots" in public education...$25,000 of "play money" for one class AND a $75,000 donation to equip the classroom from the Nasdaq Stock Market...along with a visit by "a pair of senior officers" for the dedication. Cairo, we can watch the financial news on, there!

From the Washington Post...

An Investment In Education

Joining a Trend, Gaithersburg High Students Learn About Economics by Buying Stocks With Real Dollars

By Daniel de Vise
Washington Post Staff Writer

A team of investors at Gaithersburg High School bought 1,000 shares of JCPenney at $71, panicked when it dipped below $70 and sold when it inched back to $71, making nothing. Now the stock is trading around $80, and the students are kicking themselves.

Those were illusory shares bought with pretend money. But the stakes are about to rise. School officials said Monday that the 18-student investment class will soon be making decisions with $25,000 in cold, hard cash.

A trading room for Gaithersburg students opened Monday in a ceremony led by Montgomery County School Superintendent Jerry D. Weast, who said it was the first of its kind in the country. The classroom is outfitted with a data board, an electronic ticker, an LCD television screen piping financial news to the young traders -- and thanks to an anonymous donor, a five-figure bank account with which to work.

"It's kind of like the real world instead of just a classroom environment," said Stephanie Williams, 16, a junior in the student-managed class.

With the introduction of the course this fall, Gaithersburg became one of a small number of schools in the nation devoting an entire seminar to investing, a topic more commonly taught as part of an economics or financial planning class.

The most intriguing part, financial educators say, is that students will invest real money.

"You have to have real money involved in order to get the students to take it seriously," said Scott Hoover, adviser to the student investment club at Washington and Lee University. "If you can get the students to take it seriously, they can do wonders."

At Washington and Lee, one of a growing number of universities that give students real dollars to invest, the club has $1.6 million at its disposal and has performed as well as the best professionals, Hoover said.

Ron Dietz, a Gaithersburg High teacher, hopes the infusion of cash will similarly inspire his students, who, after several weeks of daily classes, now probably know more about securities than most adults.

"I think it will definitely make them more cautious of their picks," Dietz said.

As if to underscore the point, Weast pointedly asked some of Dietz's students how they would invest their grandmother's money.

"Government bonds," one replied, prompting laughter.

By introducing real money into a high-school investing class, Gaithersburg is mirroring recent efforts in other District-area schools to teach students the value of a dollar. Students at a number of schools, including the Gaithersburg campus, bank their allowances and pay from mall jobs in credit unions run by classmates. Such programs have been praised for teaching students life skills in an era when public schools have drifted away from the practicalities of adulthood.

The Gaithersburg students spend their class time learning about equities, researching stocks and tracking their picks in the Stock Market Game, a nationally recognized program that allows more than 600,000 students nationwide to invest a hypothetical $100,000 in a simulated portfolio.

A three-student team at Gaithersburg has made $7,500, or 7.5 percent, on its hypothetical $100,000, the best showing in the class and 31st among nearly 300 teams in Maryland, according to students Colin Mace, William Orthman and Niels Lykke.

The team did its homework, investing in big names such as Yahoo, a comfortable choice for high school students, and in more obscure concerns such as PharmaNet Development Group Inc., a drug development company.

"This class is why I come back to school after lunch," Niels, 18, said.

His class, which looks something like the set of a financial news program, was equipped with help from the Nasdaq Stock Market, which donated $75,000 and sent a pair of senior officers to the unveiling.

Although details remain sketchy, Dietz said students probably would recommend investments to the donor, who would make purchases and manage the account based on the suggestions. Dietz hopes to have students meet the donor and begin buying stocks before January, when the semester-long class will end. The fund will roll over to the next investment course, which is set for next fall. Any profits will be awarded to the school and any losses absorbed by the benefactor.

"So make some money, okay?" Weast told the class.