Steve Finkill, 16, and his partner, LoPaka Trout, 16, hedged against a recession by purchasing stock in communications and soft drink companies.
"We figured people will still talk on the phone and we bought Pepsi(stock) because everyone drinks sodas," Steve explained.
He and LoPaka also checked the top 10 stocks in USA Today before deciding how to invest their hypothetical $100,000.
For Kristen Campbell, 16, and her partner Leah Adamson, 15, buying stock in Exxon Corp. was not an issue of conscience, but one of potential profit.
"We didn't think about the Alaska oil spill. We just thought gas prices will go up," Leah explained.
She and Kristen also put part of their $100,000 into Browning-Ferris Industries because the company is involved in recycling.
The four young investors are students at Oakland Mills High School, where social studies teacher Joseph R. Staub decided this year to bring the stock market into the classroom.
With the help of broker Albert J. DeRemigis of Paine Webber Inc.'s Columbia office, Staub put together a yearlong investment project as part of the 11th-grade U.S. history and economics class.
Some students are working as two-member teams, sharing a $100,000 bankroll. Others, also starting with $100,000, are managing their portfolios individually.
The students will compete with Staub to see who can make the most money in the market by June, but that isn't the real purpose of the project, the teacher said.
"They get to see the relationship between theory and the real world," he said. "This project is raising more questions than answers, which is good.
When we get to supply and demand, it will make (the subject) less dry."
The Oakland Mills students already have seen the impact of one world event, Iraq's invasion of Kuwait, on a familiar part of their lives, gasoline prices. That effect has formed part of the class discussion as the students try to assess how the news relates to the performance of their stocks.
Staub saw a need to make world events more relevant to his students last year when the Berlin Wall came down.
"I had a TV set in my classroom and we were watching it live," he recalled. "All the teachers were excited and the kids were saying, 'What's the big deal?'" He realized he was talking to a generation that knew nothing of the tide of East German emigration stemmed by the erection of the wall in 1961 and had no understanding of John F. Kennedy's famous pledge of solidarity with the German people, "Ich bin ein Berliner."
The teacher said he saw the first signs that his students were beginning to pay attention voluntarily to news events shortly after the investment program began.
Some of his students began watching Cable News Network. Others read newspapers or watched other televised news programs, the teacher reported.
At the beginning of the school year, Staub approached DeRemigis with the idea of having each student invest an imaginary $10,000 in a common stock and follow its progress.
The investment executive came up with the idea of allowing the 11th-graders to build portfolios and trade in stocks.
DeRemigis set aside part of each Friday afternoon to take calls from students who want to buy or sell, and he comes to class once a month with a computer printout showing how each partnership's stocks are faring.
"I'm looking for some personal satisfaction out of this," said DeRemigis. "People are scared of the market and that's because they haven't been educated."
He gains an opportunity to educate them about stocks when he brings in the results of their investments.
Kristen and Leah, for example, bought stock in Toys "R" Us because they reasoned that with Christmas coming, toy sales would rise.
Over a longer term, that reasoning may not be valid, DeRemigis pointed out. Paine Webber is predicting a recession, which will mean retailing stocks will probably lag, he said. His suggestions for hedging against a recession: food, prescription drugs and utilities.
Most of the students took losses in the first round of reports, although Steve and LoPaka managed to register a slight gain in their investments.
Staub reported that the students are beginning to understand how the market works and its role in the economy.
"At the end of the first week, when the market was down 200 points, I said, 'Shouldn't we all get out?' and most of them said, 'What if everyone did that?' " he recalled.
The answer, of course, would be a market collapse and massive job loss.
Staub said he is not selling the stock market to his students, but simply wants to make economics both real and relevant to them.