THE STOCK MARKET GAME.
Part One \u2013 Choose Your Portfolio
For this assignment you will choose three publicly-traded stocks that you will follow all
quarter.
For this week you will turn in the name of your stocks with an explanation as to why you
chose them.
Don\u2019t know anything about the stock market? Don\u2019t panic. We\u2019re keeping it very simple.
Some of the links below will give you an introduction to stock market investing.
Here\u2019s what you do:
I. Choose a method for picking stocks.
First get an overview of the stock market at about.com: There are many
(probably hundreds) of strategies for choosing stocks. A very simple one that
has been wildly successful in the hands of legendary mutual fund manager Peter
Lynch is called \u201cBuy What You Know\u201d. Read about it at Introduction to the Stock
Market. and \u201cKISS\u201d\u2013Keep It Simple, Stupid! .
Using this method, choose FIVE of your favorite products or services and find out
who makes\/offers them, and who the parent company is, if there is one (this
information should be available on the company web site, or google parent
company: company name). The Ten Parent Companies That Make Your
Favorite Brand may surprise you. You are looking for companies that are publicly
traded in the United States.
You may also choose companies using your own system.
II. Research these companies.
\u2022 You are looking for information on these companies, their industries, and the
economy in general.
\u2022 The internet is a wealth of information-Google is your best friend here. Two
places to start are:
\u2022 MSN Money at http:\/\/money.msn.com (use the search box)
\u2022 Yahoo Finance\u2019s Stock Research Center at http:\/\/finance.yahoo.com\/
marketupdate
\u2022 The New York Times and The Wall Street Journal both have web sites.
\u2022 Take notes as you research for the written portion of this assignment (see step VI.
below). You are trying to get a general idea about the company and its future
performance. What products do they sell? How long have they been in
business? Are they an industry leader? Are they introducing new products?
Based on your experience with them, do they offer customers value (either in
the form of a high-quality product or an appealing price, or both?) Who are
their competitors?
III. From the five stocks you\u2019ve researched, choose your THREE favorite
companies\u2014the ones you think that will perform the best over the course of the
quarter.
IV.Look up the stock symbols and the current stock price on one of the financial
sites (msn\u2019s is at http:\/\/investing.money.msn.com\/investments\/find-symbol).
For example, the symbol for Microsoft is MSFT. Once you\u2019ve found the symbol,
click on it to find the current stock price.
V. Buy your stock.
Assume you are spending $10,000 on each stock, for a total portfolio value of
$30,000. You will complete a table listing the date, the company you\u2019ve chosen,
the symbol, the price per share, the number of shares that you\u2019ve \u201cpurchased\u201d
with your $10,000. For this assignment we\u2019re not worrying about sales
commissions and other transaction costs.
Here\u2019s an example:
Date Company Symbol Price No. of
Shares
Value
4\/3 Microsoft MSFT 25.84 386.97 10,000
4\/3 Google GOOG 390.0 25.6 10,000
4\/3 Chico\u2019s CHS 40.64 246 10,000
VI.Explain your reasons for choosing this stock. In two or three well-written
paragraphs, cover the following points for each stock you\u2019ve chosen:
\u2022 Brief company profile for each stock you own during the game. Include a \u2014
summary of the company\u2019s products, where it operates, strengths and \u2013
weaknesses \u2013 especially in comparison to competitors.
\u2022 What first led you to this stock (you like one of their products, etc.)?
\u2022 How will current economic conditions and trends affect this industry? (E.g., aging
baby boomers will boost pharmaceutical sales). Here\u2019s a list that may help from
howthemarketworks.com.
\u2022 Are there any events within the company that may affect performance positively or
negatively (new product introduction, a lawsuit pending that\u2019s been in the news,
etc.)?
Note: Your analysis should be written in narrative (or paragraph) style,
summarizing your research. Do not merely copy and paste quotes off
the internet.
Also explain why you rejected the other two stocks answering the same questions.
NOTE: For your last assignment of the quarter you will look up the stock price again
and compute your ending portfolio value. You will briefly discuss your stock\u2019s
performance and what you think influenced it, including current events that affected the
economy and stock market in general, and your company in particular. You will turn
this in, along with an updated table that shows the return on your portfolio.<\/p>\n","protected":false},"excerpt":{"rendered":"
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