Golden Years Exercise

Understanding the Stock Market

Advance Preparation:

Print out copies of the Stock Market Chance Cards. Cut them into 16 cards. You may wish to print out several sets, cut them, and put them in a plastic sandwich bag for easy use. You can then hand one bag to each table of participants that will be playing the game in your class.
Print out the list of stocks to purchase.
Print out the score sheets - one for each team or player.

Instructions:

Begin this exercise by telling everyone that they are going to learn more about the different things that can affect the price of any stock that you own.
Divide class into tables (teams) of 5-6 people. Distribute a bag with the Stock Market Chance Cards in it. Give each person a score card.
Have each team elect a score keeper.
Tell each table that they have $100 to invest in shares of stock from one company.
Hand out the list of stocks to buy. Have the score keeper keep a record of which stock the group picks, and how many shares, to equal $100.
Tell teams to pick cards from the deck of Stock Market Chance Cards. Go around the table, and have each person pick one card and read it aloud to the group.
The score keeper should record what happens to the groups’ stock on the score card, based on what they read on the card.
Play continues until everyone at the table has read one card.
Once everyone has finished, go around to each team and ask what their final net worth is.
The team whose stock has gone up the most wins. (It is a good idea to have some sort of prize to hand out).

Facilitated Discussion:

Ask the group what they learned about investing in stock. Explain to them that some basic lessons are:

The price of stock goes up and down a lot.
A lot of different things can affect the price of your stock.

Ask the group if they have any questions.

Microsoft: 1
Gates and Co. branch out into the highly competitive wireless communications market by introducing a new product to compete against Apple’s I Phone, the RezPhone. The RezPhone sells extremely well and your stock goes up by $2 per share.
All Other Companies:
There are rumors about your CEO cooking the books. Your stock goes down $1 per share. / Applez: 2
Applez invents a new product: Instant Frozen Indian Tacos……Yum! The product is selling very well and your stock goes up $2 per share.
All Other Companies:
Your company’s profits last year were lower than projected. Your stock goes down by $2 per share.
3
The S & P 500 drops 60 points in one day. The whole stock market reacts as investor confidence declines. All stocks go down 10% per share. / TinyTim: 4
An article about TinyTim Pharmaceuticals appears in Smart Money Magazine. Your company is identified as “one of the most promising small companies of the year.” Your stock goes up $1 per share.
All Other Companies:
Your company fires its CFO (Chief Financial Officer) amid allegations of improper accounting……Uh Oh! Your stock goes down $1 per share.
Microsoft: 5
Antitrust violations are again directed towards the software giant. Stock goes down $2 per share.
All Other Companies:
Your 4th quarter earnings were higher than expected. Your stock goes up by $1 per share. / Microsoft and BigCorp: 6
A weakening dollar leads to increased quarterly profits from foreign exports and higher oil prices. Your stock goes up $3 per share.
All Other Companies:
A weak dollar leads to higher commodity prices (especially oil) and lower consumer spending. Furthermore you have no global export sales to benefit from like MSFT and BigCorp. Your stock goes down $2.
BigCorp: 7
Crude oil hits $120 a barrel based on shrinking inventories combined with increased global demand. Your stock goes up $4 per share.
All Other Companies:
Higher oil costs mean higher costs of doing business, and consumers have less money to spend ….dang, that Hummer sure does cost a lot to fill up! Your stock loses $2 per share. / RezCarz: 8
RezCarz lands Lebron James as a celebrity endorser, and suddenly all of America wants a rez car in their driveway! Stock doubles in value.
All Other Companies:
The consumer confidence index slips dramatically causing all stocks to lose $2 per share.
TinyTim: 9
TinyTim is the target of a huge lawsuit regarding a patent violation which threatens to wipe the company completely out. Your stock loses half its current value.
All Other Companies:
A larger company buys out your company. Your stock price goes up by $2 per share. / RezCarz: 10
Continued distress in the credit markets cause lenders to require more stringent terms to borrowers. Your stock loses $2 per share.
All Other Companies:
Your company hires a new CEO who is well regarded in the industry. Your stock goes up by $2.
TinyTim: 11
Researchers have developed a miracle vaccine that will effectively wipe out the common cold! Your stock increases by10 times its current value.
All Other Companies:
Your company buys a smaller company. Your stock price goes up by $2 per share. / 12
The stock market declinessignificantly in one day, reacting to a crisis as a large number of people default on their home mortgages. The whole stock market reacts as investor confidence declines. Your stock goes down $1.
Ho-Chunk goes down $5. You guys build houses…..remember?
RezCarz and Casinos –R-Us: 13
Continuing troubles with the sub-prime meltdown cause your bond insurance company to lose its AAA credit rating. Both you guys are heavily in debt. Both stocks go down 25%.
All Other Companies:
The latest monthly labor report shows fewer people than expected have filed for unemployment. The broad market loves the good news. Your stock goes up $2. / Casinos-R-Us 14
A new study reveals that a booming Native American casino industry continues to pull business away from Las Vegas and other non-native gaming venues……sorry Donald Trump! Your stock goes up 50 percent.
All Other Companies:
Fed Chairman, Ben Bernake, gives a speech and states that the threat of a recession is high. All stocks lose 10%.
Applez: 15
Allegations of food poisoning at several Frybread Shack restaurants have protestors picketing and customers fleeing in droves. Your stock drops $5 a share.
All Other Companies:
The Fed lowers the discount rate (the interest rate it charges banks to borrow its money) half a percentage point. The broad market rallies hoping a capital infusion will help stimulate the economy. All stocks rise 10%. / BigCorp: 16
A major oil pipeline bursts, spilling millions of dollars in oil and contaminating a treasured wildlife reserve. Your stock drops 15%.
All Other Companies:
Your company hires a new CEO who is well regarded in the industry. Your stock goes up by $2.

List of Stocks to Purchase

Name / Ticker Symbol / Price per share
Applez Corporation / APZ / $10
HoChunk, Inc. / HOC / $20
Microsoft / MSFT / $30
TinyTim / TTM / $1
BigCorp / BCP / $25
RezCarz / RCZ / $10
Casinos-R-Us / CRU / $10

COMPANY PROFILES

Applez Corporation: Rapidly growing foodservice company that operates a regional chain of pow wow theme diners, “The Frybread Shack”. Unique restaurants offer traditional native cuisine at affordable prices. Company has recently introduced a native foods product line for sale in supermarkets.

HoChunk , Inc: Rapidly growing tribal enterprise focusing on home construction, commercial building, and sales of office equipment. This is a real company folks, although it’s not actually publicly traded.

Microsoft: The world’s leading manufacturer and distributor of PC based software products, merchandise, and related intellectual property. With market capitalization of close to $300 billion it is one of the largest companies in the world.

TinyTim: One-year-old micro-cap biotechnology company, specializing in pharmaceutical research and development. It’s a long shot, but you never know…..

BigCorp: Well established, large cap, blue-chip oil company. Specializes in global wide drilling, refining, and distribution of petroleum-based products.

RezCarz: National chain of used car dealerships. Targets lower income consumers with poor to marginal credit. Mid-cap company is highly leveraged, meaning it has borrowed a lot of money to begin and continue operations.

Casinos-R-Us: Medium cap gaming operations supplier; primarily provides slot machines, table games accessories, and related software to Native owned casinos. This company is also highly leveraged.

Score Card for Stock

Team Name______

Name of Stock______

Price Per Share______

How Many Shares Bought for $100? ______

Last Price Per Share / Change in Price / New Price Per Share / Multiple times number of shares owned / Total Worth
Example / $10 / +2 / $12 / X 10 / $120
1
2
3
4
Option to sell
5
6
7
8

If the “buy and hold” strategy just isn’t working out for your team, after round 4 you have the option to sell your old stock and purchase a different one. To do this, divide your current total worth by the price of whichever new stock you choose from the list. This will give you the number of shares you now have in your new company.