Girls Beat Investment Pros

May 26, 1994|By Joel Obermayer | Joel Obermayer,Sun Staff Writer

They are shy, 9- and 10-year-old girls with polished shoes and bows and corn rows in their hair. They would rather jump rope or play kickball than stay in class and practice cursive writing and long division. But this group of fourth-graders from Aberdeen might have a thing or two to teach some Wall Street professionals.

During a 10-week period this year as the Dow Jones industrial average dropped 5.6 percent, they gained 11 percent on a $100,000 investment.

The feat was good enough to rank them first out of hundreds of teams of students participating in a statewide investment contest. While the money was fictional, the returns were not.

In fact, the dozen girls from Bakerfield Elementary School would have ranked first out of the 1,459 domestic general equity funds tracked by Lipper Analytical Services Inc. in Summit, New Jersey. During that time period, only 20 of those funds made any money.

"Most of us hadn't heard of the stock market before, but we thought we'd give it a try," said Laurenn Beck, a member of the team, after an award ceremony in Baltimore yesterday. "We just kept plotting to see if our stock went up or down, and it went up a lot."

Laurenn's team is an example of a growing number of children who are encouraged by teachers and parents to learn about stocks and investing at a young age. The stock market game had only 26 teams participating in Maryland eight years ago, but that number has increased to 1,100, with groups from 20 out of 24 county school systems statewide participating, according to Allen Cox, director of the Loyola College Center for Economic Education who runs the program in Maryland. And when Chicago-based mutual fund company Stein Roe & Farnham Inc. recently introduced a mutual fund designed for young investors, its phone system was swamped by calls from interested parents.

Mr. Cox said stocks are an excellent tool to give students an appreciation of the business world.

"It's a great way to teach kids about economics and about companies," Mr. Cox said. "Many of them end up learning about markets and international trade."

The contest Mr. Cox runs is called "The Stock Market Game" and runs twice a year in Maryland. It pits teams of students in elementary, middle and high school against each other. Each team is allowed to buy a fictional stock portfolio worth $100,000 during the 10-week event. Teams may buy or sell stocks each week and have to pay commissions on all their trades.

Over 100 computers to help teachers with the game were donated by the National Association of Securities Dealers, which runs Nasdaq, earlier this week.

"It's just like investing in the real world, in some situations they are buying stocks they know about, sometimes they get tips from a broker or their parents or the newspaper," Mr. Cox said.

Most groups diversify. "But the younger kids are more likely to pick a stock or two they've heard of," he said.

Nancy Dryden, the Aberdeen girls' teacher, said last fall her whole class played the stock market game, but the boys dominated all the decisions. So this year she divided the class into a boys' team and a girls' team.

In January, while the boys were considering investments in Nike and Bethlehem Steel, the girls started plotting stock prices for Campbell Soup, Kmart and Coca-Cola on their classroom blackboard, Mrs. Dryden said. In addition, they added the stock of a lesser-known trucking company called Roadway Services.

Nine-year-old Kara Gaddis' father, Arthur, was working parttime at the company's terminal and had been impressed by the company and by the working conditions there.

"He told me what a good company they were," said Kara Gaddis. "So when we started talking about stocks in class, I remembered."

Armed with that information, the girls chose to invest entirely in the company, despite the fact all its drivers were on strike as part of a nationwide walkout by the Teamsters Union. With the stock declining, Kara pestered her father about when he thought the strike would end, according to her mother, Ruby Gaddis. A week before the contest ended, the strike was settled and the stock shot upward, leaving the team in first.

"Kara couldn't sleep for two days she was so excited," said Mrs. Gaddis.

Was their performance beginners' luck? Perhaps, but consider this: During a class this year, Mrs. Dryden suggested that her students start following the stock of a Maryland drink distributor called Atlantic Beverage after an article appeared about the company in a newspaper. One of the girls objected. She said she had tried one of the drinks it handles and didn't like the taste. Several classmates agreed, and the group chose not to study the company.

Since the beginning of the year, Atlantic Beverage's stock has fallen from $6 a share to $4.25, a 29 percent decline.

Five of the girls say they want to be stock brokers when they grow up.

"It's even better than being a doctor," Kara said.

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