Area Students Take a Flyer in Stocks
By Jon Chavez, The Blade, Toledo, Ohio
Jan. 28–ANDREW Shadler is bullish on Ford Motor Co. Despite the fact that the automaker just posted a $12.7 billion loss, the worst in company history, Andrew reasons that Ford’s ongoing restructuring, plus new 2007 vehicles like its Edge crossover sport-utility vehicle, will send its $8 a share stock soaring fairly soon.
But Andrew isn’t a Wall Street auto analyst. He’s a member of a fifth grade class at Fairfield Elementary in Maumee, one of 37 schools competing in The Blade’s School Stock Contest.
And while his choice of Ford was agreed upon by the 22-member class only because their first choice, Nintendo Co. Ltd., was not eligible, Matt Faltys, of Fifth Third Bank, said Andrew’s logic is sound.
“That’s as good a reason as any and a better reason than most adults will use,” said Mr. Faltys, vice president and director of portfolio management for Fifth Third, which is co-sponsoring the contest and is tabulating the results. The Blade’s Newspaper in Education program also is a co-sponsor.
“Most people will look to the past when picking a stock, but looking towards the future is really how you should do it,” Mr. Faltys said.
Fairfield Elementary’s team, called the $-Makers and advised by their teacher, Barbara Coleman, is one of a whopping 95 teams that entered this year’s 16-week contest, which began Jan. 19.
Nearly 1,350 students are involved in the teams, who will pit their knowledge of the stock market against each other with a shot of winning a first prize of $250 for the first-place team and $250 for the school.
For the contest each team picked four common stocks from the major exchanges that traded for at least $5 a share at the close of the markets on Jan. 19. A hypothetical $40,000 was divided evenly among the four choices.
The team whose portfolio increases the most in value by the 4 p.m. close of stock trading on May 11 wins first prize in either cash or gift certificates. Second place receives $150 for the school, third place $100 for the school. Last year’s contest attracted 37 teams from 21 schools and about 600 students.
At Bowling Green High School, Terry Mulgrew, who teaches economics, and Tom Smathers, who teaches history, promised 100 extra-credit points to students who formed teams, researched stocks, and entered the contest. The school is fielding seven teams.
The contest will help students meet state education targets for economics, “but this could be a life skill for some but there is also some fun looking at this,” Mr. Mulgrew said.
Rebekah Pearson, captain of Bowling Green’s “Ms. Money” team, hopes for a steady performance from McDonald’s Corp. and Nike Inc. and a boost from her team’s other two picks, retailer American Eagle Outfitters Inc. and automaker Toyota Motor Corp.
“Toyota makes a lot of hybrid cars and I think that’s going to help,” she said. “American Eagle, they’re coming up and they’ve got a new spring line coming out.”
Brandon Rife, a member of the JBad Inc. team at the high school, admitted he entered the contest for the extra credit, but wouldn’t mind winning. “It would be nice,” he said.
At Fairfield in Maumee, the fifth graders chose Ford, Apple Inc., eBay Inc., and Cedar Fair LP from a list of 12 potential stocks they came up with.
Tyler Frank helped sell his classmates on Apple. “They have the iPod and everybody wants its laptops. Schools have a lot of Apple computers,” he said.
Two financial advisers came to the school to tell the students about the stock markets and provide tips on picking stocks, Ms. Coleman said. Two years ago, Fairfield won the Blade’s school stock contest, but Ms. Coleman said it was mostly luck and she has no such aspirations this year.
Her goal is to prepare the students to meet state education standards for knowledge about economics, she said.
Dinah Garrison, a teacher with Toledo Public Schools’ Horizons program for gifted children, said her five classes of sixth graders had a choice of study this year: the stock market or mythology.
Those who chose the stock market got to take part in the contest.
Most picked stocks they know, such as Nike, Wal-Mart Stores Inc., Coca-Cola Co., Best Buy Co. Inc., Sony Corp., Pepsi Bottling Group Inc., and Microsoft Corp.
“One of the parents said if they did well, she’d give them $100 to invest for real. They were pretty excited by that,” the teacher said.
Buying what you know is a good rule of thumb, Mr. Faltys said. “Warren Buffett has done fairly well with that strategy,” he added.
Overall, the teams adhered to that formula, with well-known consumer products and retailers dominating the selections.
Apple was the overwhelming top choice, selected by 26 teams. Next were Nike, Google Inc., Walt Disney Co., Sony, Microsoft, Pepsi, and Wal-Mart. In all, 126 stocks were chosen.
“The best strategy is to pick one or two flyers and hope the remaining two stocks don’t blow up on you,” Mr. Faltys said. “Some of these teams have clearly done that.”
At Bowling Green High, the JBad team picked as gambles tech stock Cisco Systems Inc. and Seattle Genetics Inc., a company that makes cancer-fighting compounds and recently signed a collaborative deal with big pharmaceutical maker Genentech Inc.
Danielle Beaverson, of the C Money team at the school, said she participated in the contest last year as a freshman. Her team had Google last year and she chose it again this year for its steady performance.
But this year’s team also picked Huntington Bancshares Inc. because of its recent announcement that is buying Sky Financial Corp. of Bowling Green.
“Hopefully, they’ll go up now that they have added more offices,” she said. The purchase, however, won’t be finalized until late this year, so it is unlikely to have much effect on the two stocks in the next several weeks.
Teams have the option this year to change one or more of their stocks at the contest’s midway point. That will come into play heavily for 10 teams from Bedford High School’s economic classes.
Students selected the stocks last semester, and new groups of economics students are now following the choices. The new groups would be the ones to make changes, said teacher Cathy Long.
The real goal for all teams, said Fifth Third’s Mr. Faltys, is to avoid pitfalls. “If you really want to win the contest, you have to look for stocks that won’t lose money,” he said.
“It will be interesting to see where we end up the first week. After the first few days there’s going to be more than half the teams losing ground. After week one last year, you only had six teams in the money.”
Contact Jon Chavez at:jchavez@theblade.comor 419-724-6128.
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Copyright (c) 2007, The Blade, Toledo, Ohio
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