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Buy Low, Sell High
Buy low, sell high. That’s just one of the mantras more than a thousand Colorado high school students recited while participating in the Junior Achievement Stock Market Challenge recently. CPR’s education reporter Jenny Brundin took a peek into the chaotic world of teenaged high stakes trading and filed this report.
Here is a transcript of her report.
Reporter Jenny Brundin: It’s early in the morning. Way too early for high school kids. But when they file into the Cable Center at the University of Denver campus – what must be a hundred pounds of sugary donuts await them. Enough to wake them up.
Announcer: Martin Luther King Jr. Early College….MLK Team: Yeah! (cheering)
Reporter : The winner among these 60 teams will be the one that ends the hour with the largest portfolio. They start with $500,000 in stocks.
Announcer: 3, 2, 1 (bell rings)
Reporter : Oh, something else I forgot to mention. Each “stock market day” lasts 60 seconds. The competition lasts 60 days. I calculate – that’s one hour of donut-fueled intensity.
Boulder High Team 3: Hey no! Don’t buy in Credit Fuel, its going down.
Reporter : Boulder High Team #3. It’s their first time here.
Girl 1: Sell, you need to sell!
Girl 2: Keep it!! if it’s going up you have to keep it!
Girl 1: No if it’s going down you have to sell it.
Trader: Hot tip!
Reporter : Every few minutes the kids get a “hot tip” about a company –or a major world event that could rock their stocks.
Girl 1: Axel Group has reached an agreement to provide lithium ion polymer batteries…(fade under)
.Reporter : They can be a little tricky to decipher.
Girl 1: Wait! A shot in the arm? Wait! What’s that? Is that bad or good?
Girl 2: It’s good. OK, we’re alright.
Reporter: Next table over, the Boulder High Boys Team 4. They also have split opinions.
Boy 1: Let’s invest in Axel right away.
Boy 2: Dude, I think we should put it in PZI, man.
Reporter: They already own stock in PZI. They turn to a giant screen of rolling stocks see how their stock’s done. Not good.
Boy 1: We bought it at 36.75. Boy 2: Ouch. Boy 1: Swearing.
Reporter : These kids even swear like real traders.
Reporter: Swearing aside, organizers say kids are learning a lot: how important capital is to business, and how world events impact the economy. They gain skills to manage their financial futures. After all, these kids aren’t really counting on having social security or pensions. They figure they’ve got to make their own way. Student Jarod Young says when he’s older he would invest just to help his family make ends meet.
Jarod Young: I just want to be able to pay the bills and just have a little money left over and save it.
Reporter : Josh Neiman from Boulder High says he knows it can be risky, but investing can be a good way to keep up with inflation.
Josh Neiman: Well when you put your money in a bank you make 1 percent maybe. You put it in the stock market, historically you make 7 or 8 percent. If you just diversify it, it’s a really smart way to maintain your money.
Reporter : The competition’s also about teamwork. But tor Boulder Team 3, working together is a challenge – especially when the one boy on the team goes rogue. He approaches a trader to make a sale on a steel stock that’s going up:
Trader: What are you selling?
Jack Daly: Sell all of our shares in GPC?
Reporter : The move does not go down well.
Anna Daly: I told you just to sell some. Not all of it!
Jack: No you didn’t.
Anna: Yeah we did.
Reporter : The tension between these two is fierce. No wonder. I find out later they’re twins - Jack and Anna Daly. Never go rogue on your twin is the strong vibe I’m getting. But the team calms down, comes to their senses.
Anna: Let’s make a deal that we discuss with the team exactly what we’re going to do before we do it so we don’t have that problem again!
Reporter: A couple of minutes – er days – pass and it turns out Jack’s move wasn’t all that bad.
Anna: Sorry for yelling at you Jack.
Reporter : At half- time – I guess that’s what you call it - Boulder Team 4 is in 32nd place. So they do something drastic – sell a bunch of stocks and invest heavily in a company they think will go up. It doesn’t pan out.
Boy 1: Groan. Whatever. Are we still beating Boulder 3? Boy 2: No they’re ahead of us. Boy 1: Oh my God, really?
Reporter : The Boulder boys are horrified to learn that the freshmen Boulder girls plus Jack have beat them. In fact, Boulder 3’s portfolio grew 50% and their chaotic strategy got them to 18th place! And – they learned a lot about teamwork. Here’s Jack:
Jack: Communication was our biggest problem, but we really sorted things out at the end. Girl: And also – we really need to have more trust in each other because sometimes we were going to sell something …(fade down)
Reporter: But for all their lessons, they still didn’t win the day. Here’s the captain from Rock Canyon High Team 1, Noah Tarutis.
Noah Tarutis: We kind of put all of our eggs in a couple of baskets and kind of played it safe a little bit and kind of fluctuated with how we played it safe and then sometimes we spent a whole lot of money.
Reporter: You may not understand what he just said, but his team obviously did. Rock Canyon High teams swept – swept! - first, second and third place.