BELMAR — Value traps, P/E ratios and growth potential are often challenging concepts to learn on your own.
For students at St. Rose High School, they have the benefit of having a teacher with 30-plus years of experience on Wall Street to help them navigate the market and teach them the basics of what it means to be an investor.
Those lessons are put into practice throughout the year, as students in Anthony Attardo’s classes are pitting against other students throughout New Jersey in the Stock Market Game [SMG], a weekly student exercise created by the Securities Industry and Financial Markets Association to teach students the fundamentals of the market.
Students in Mr. Attardo’s accounting, economics and personal finance classes are broken into groups and assigned to manage a portfolio worth $100,000 as part of the game. One group of students, called Lululemon after the company of the same name, earned enough with their hypothetical investments, more than $110,000, to finish the week ending April 16 in sixth place among 750 such groups in the state, and fourth in the region.
“From the SMG game, I learned about the importance of stocks and how important it is to have a diverse portfolio that provides well-rounded returns,” Tom Lafferty, a student in the group, said. “What’s cool about it is that it provides you the money and you have to be the voice of reason and create an effective portfolio.”
The group, made up of Tom Lafferty, Max MacEachern, Victoria Wilson, Chris Huisman and Michael Fluhr, used its hypothetical $100,000 to buy into bluechip companies like Disney, Exxon Mobil, General Motors and Microsoft.
“There are a lot of factors that went into choosing stocks,” Michael said. “Our group researched the products, future plans, growth potential and P/E [price/earnings] ratios of many companies. It was important for us to evaluate how a specific company will continue to make money in the future. Another factor in our decision process was diversity. We wanted to make sure we chose successful companies from different sectors like entertainment, technology, and automotive.”
When looking at which companies to invest in, the students would have to make the case to their teacher before finalizing the transaction.
“When our team was picking and deciding which stock to include in our portfolio, we referred to our own practical anticipations of whether or not said companies stock would be profitable due to the company increasing in size, gaining popularity, and even if that company is recovering and making a comeback from the pandemic,” Chris said.
The group also took a chance by putting money into Roku, a video media streaming service that went public in 2017.
“When we added Roku to our portfolio we noticed that Roku TVs are very present in our lives,” Michael added. “This led us to research the high growth potential of Roku since they are such a relevant company during this pandemic.”
To their teacher, Mr. Attardo, the game works into the overall message of the class and the main lesson he wants students to take away at the end of the year.
“It’s extremely important, not just for students to know to invest money, but what I try to teach the students here is how to manage their money,” Mr. Attardo said, adding that the Stock Market Game precedes his own time as a teacher at the school. “What I hope the students take from our curriculum is to have adequate knowledge to make smart decisions with their money, including investments.”
For some students, the exercise opened their eyes to opportunities around them.
“What I learned from the Stock Market Game is that you have to invest in what is around you,” Victoria said. “A lot of the time people focus on more obvious investments and forget that sometimes the items you use every day from certain companies can be great investments, too. What’s cool about the Stock Market Game is that no one told us where to invest our money and we had the freedom to do whatever we wanted with the money we were given, and it was enjoyable to see how our own ideas for investments played out.”
This is an excerpt of the print article. For more on this story, read The Coast Star—on newsstands Thursday or online in our e-Edition.
Subscribe today! If you're not already an annual subscriber to The Coast Star, get your subscription today! For just $34 per year, you will receive local mail delivery weekly, with pages and pages of local news and online access to our e-edition on Starnewsgroup.com.