Six students at Westwood accomplished what few adults can: mastering the stock market. Two teams competing in the Georgia Stock Market Game each finished as regional winners. Fifth grade students Michael Harbin, Denzel Vasquez, Sawyer McKeehan and James Kelley made up the fall winning team, and fourth grade students Peyton Bearden and Garv Patel won this spring.
Randy Russell, senior financial advisor for the Metro Atlanta District with VALIC Financial Advisors, comes as a guest advisor at the start of each game to explain the basics of the stock market and strategies to the students. The game is a simulation of the real stock market in which teams invest $100,000 in a 10-week time span and manage their portfolios in competition with other teams.
The spring team finished 70th out of 2,079 teams. Bearden and Patel learned a lot about making predictions through the process. The team was able to use the game to better understand complex economic concepts that will help them as they move through school.
For example, shorting stock is a complicated process to a novice. It is the process of borrowing stock you don't own, selling it, and pocketing the proceeds. Later, you have to buy back the stock and return it to the owner from whom you borrowed the shares. This means a person who shorts a stock makes money when the stock declines, rather than appreciates.
"They learned that they need to buy when the company is 'in the mud' and sell when 'they're in the grass,'" explained coach and teacher Martha Thomason. "They bought some at first, but short selling is what helped them win the game."
The students said they learned that sometimes taking risks is the only way to get ahead. "My advice to a new team would be to short sell companies, take risks and check the history of the company to see how much it has bounced up and down," said Bearden.
And although the stock market was more unpredictable this spring, the students had to strategize about which companies were the wisest to invest in. "We chose companies by looking at which ones are used the most, like Apple and Netflix," explained Patel.
The fall team used the season to their advantage, investing in The Hershey Company because it was almost Halloween.
Harbin said that playing the game in previous years helped them understand how to play better and be more selective when choosing which companies to follow. "It's best to invest most, but not all, of your money," he said. "We were careful with our money. We always kept a little bit extra in case something went wrong."
Kelley explained that investing in the company Credit Suisse (TVIX) was the turning point in the game. "We knew we wanted to short sell a company as part of our strategy, and when we saw TVIX was going down, we took advantage of it," he said. "We got it cheap and then made money when it went down."
The team played it safe, opting not to use the optional $50,000 the game offers, in addition to the original $100,000, because they were at the top and didn't want to lose their spot. As careful as they were, Vasquez pointed out that, "If I were doing this in real life, I would play it much safer."