i'm not sure if this got posted on the thread...
Classroom investing contests under fire
'Creating day traders': Value investing may be educational, but it doesn't win prizes
Dolores Kong
The Boston Globe
BOSTON - Handel Obas, 18, watched the stock market ticker move across the bottom of the television screen in his social studies class at John D. O'Bryant School in Boston, went back to his desk, and debated what to do.
"Oracle was at $77. Now it's at $85, a 52-week high. So what do I do?" said Mr. Obas, a 12th-grader at the Boston high school that specializes in mathematics and science. By the end of the class, his three-member team decided to add Oracle and another technology giant, Sun Microsystems, to their stock holdings.
Their portfolio, of course, is hypothetical, since the three students are participating in a national virtual stock market competition. Such contests have gone big time and online, following the booming interest in financial markets, the Internet, and do-it-yourself investing.
But while supporters of these competitions say they are a valuable tool for educating children and adults about financial markets, others worry about the lessons being learned, especially by youngsters. They question whether some competitions are, in fact, promoting day trading and risk-taking.
"I'm all for teaching kids in school about how markets work and what prudent investing is," said Marvin Steinberg, executive director of the Connecticut Council on Gambling Problems. The council has developed an online self-scoring quiz on gambling in the financial markets at the request of the U.S. Securities and Exchange Commission.
But if a competition encourages students to take high risks and make frequent trades in a short time frame, Mr. Steinberg said, "It's teaching the wrong thing and creating future day traders."
Ted Murphy, president of MarketPlayer.com, which runs a number of virtual stock competitions, disagreed.
"I think there is a place for trading and there is a place for buy and hold," said Mr. Murphy. "An individual investor has to figure out where their place is in that spectrum." And the best way for a person to figure out which investing style works is "by playing in stock competitions. You can't get it from books or self-styled experts. It's just not possible."
MarketPlayer.com claims it offers institutional-quality stock screening and charting tools, allowing contestants to mimic all investing styles.
Donna Haggarty, director of marketing for the Securities Industry Foundation for Economic Education, draws a distinction between The Stock Market Game, her nonprofit group's competition, and those run by for-profit companies. "Our focus is really education," she said. "We're completely noncommercial. We do not hold big-money competitions.
"Our teaching materials suggest responsible participation in the stock market requires a long-term perspective, a good amount of research, and some discipline."
But Mr. Steinberg, of the council on gambling problems, who has reviewed the materials for The Stock Market Game, said: "I have mixed feelings about it and always have."
Students at John D. O'Bryant School in Boston put in buy orders for Sears, Guess, and The New York Times, holding to the popular investment philosophy of buy what you know. Their portfolio already includes Nike and Timberland.
As the bell rings, the last thing students see as they file out is a note from their teacher taped to the door: "If you want to make money, you have to be willing to be bored." |
