Tuesday, October 18, 2011

The Stock Market Game

We bought $40,000 worth of stock today.

Yep. You read correctly. Forty. Thousand. Dollars.

Fake money. We are playing The Stock Market Game, have been for a couple weeks now, and it is fun, fun, fun. Who knew spending fake money and watching it rise and fall could be so rewarding? So far we are in 2nd place in our region (only out of 8 teams, but we were in dead last last week, so I feel pretty good about it), and we are rising up in the state (474 out of 3600 teams). To be sure, not everyone has started yet; the game lasts until December 3rd, 2011 (the spring game starts in February), so teams still have a while to join in.

When I went to training for this, the trainer said the biggest issue is spending all your money (teams get $100K); it is hard to send even fake money into the ether, and then to watch is whittle down (or creep up) in penny increments. We have been watching the news as a school since we started investing and taking notes on possible stocks for the future (our first purchase was Apple stock, which is doing quite well, thanks to the iPhone 4S and a possible iPhone 5). Since that purchase, we have diversified to add a grocery store chain, a videogame designer, several pharmaceutical companies and a few other odds and ends stocks.

So far, here is what we have learned:

1. There is a TON of information out there, which is why people buy mutual funds instead of individual stock.
2. There are stocks you can buy for a dollar or two (not in the Stock Market Game - has to be a least $10), so you could potentially get into the stock market fairly cheaply.
3. Searching for stocks is addictive.
4. Companies are tied to one another in ways that are disconcerting and mildly discomfitting. Certain "American" brands are very, very heavily invested overseas, and certain "foreign" brands own a ton of the United States. We will delve more deeply into these connections as we go (and there is less to research), but they get a little disturbing in some instances, like conspiracy theory disturbing.
5. Talking about money is FUN. Even when it isn't real, and the stocks are tanking, trying to predict the market is challenging and engaging, and time flies when we all start talking about the potential of our investment. Don't get us started on the P/E ratio.
6. The Stock Market Game is a great way to tie in eleventy million different subjects.
7. A whole bunch of specific stuff, too, too much to list.

I highly recommend playing the game. Each team you sign up costs $7, and the game runs twice a year (once in the fall and once in the spring). States differ, but winning teams for each region usually have a banquet, and state winners get some other stuff, plus the teacher goes to New York to visit the Stock Exchange, all expenses paid.

Later this week we are going to start buying on margin, and tings will really get interesting...

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