Do students who won investment contest have lesson for you?

Three Clayton County fifth-graders recently beat more than 3,800 teams of students to win the top spot in the Georgia Stock Market Game, AJC writer Tammy Joyner reports.

Not only did Jaylen Thompkins, Jacob Thomas and Kenny Chong beat the competition statewide, they outperformed the U.S. stock market— all while managing their investments during the after-school program at E.W. Oliver Elementary School in Riverdale, Joyner writes.

The trio earned nearly $63,000 on an initial hypothetical investment of $100,000 in the 10-week contest. They outperformed the stock market by 58 percent, Joyner reports.

Their portfolio consisted mainly of one stock — not the strategy money managers advise for investing real money, Joyner writes. They started with three stocks, but wound up basically betting the farm on pulp paper company Mercer International.

Is there a lesson here? If you play in a risky game like the market, then should some of your money go against conventional wisdom — despite what the so-called experts say?

Or since you have real money at stake, is being cautious, diversifying, relying on mutual funds and not betting on one stock still the way to go?

I’m a conservative investor who uses stock mutual funds. But I wonder if I should take a very little — of the little I have — and invest in a company that might take off?

What do you think? What’s worked or not worked for you?

- Henry Unger, The Biz Beat

For instant updates, follow me on Twitter.

8 comments Add your comment

Corey

May 11th, 2011
7:56 am

Daily bigots on these forums, stop bashing and writing off entire minority communities based on hyped up Action News reports at 5 and 11.

Curious

May 11th, 2011
8:30 am

what is the site to play this game?

Jim

May 11th, 2011
8:40 am

You can get information on the Stock Market Game here:

http://www.gcee.org/stock_market/open.asp

Roach

May 11th, 2011
8:56 am

That’s exactly how the big boys do it. Senior execs taking big risks to claim the short-term payoff (the big bonus) now. If the long run doesn’t look so good, well IBGYBG (I’ll be gone, you’ll be gone). Short term only–that’s what this contest encourages. Any adjustment for risk? Didn’t think so.
There are individual securities out there that will dramatically outperform the market in the short term (and congratulations to this school’s team for finding one). But we don’t live our real lives in the short term.

#1 Foxy Lady

May 11th, 2011
4:27 pm

The contest is a very good validation of monkeys throwing darts at the stock charts (nothing intended against Clayton County).

Better than betting all or a significant part of your money on a company, why not bet a few dollars on the lottery? Your single dollar could return literally hundreds of millions. That is what I bet fifth-graders and their misguided teachers would call a “great investment”.

Betting in individual stock is for people who don’t understand math.

The Dogfighter Returns

May 11th, 2011
5:18 pm

while the peasants buy and hold the big wigs are in and out all day taking your lunch money. The ponzi scheme is designed to make the managers rich. the managers in turn keep buying politicians who are happy to do whatever is necessary to keep the ponzi scheme going.

Don’t be the last man holding the bag.

Hi Roller

May 11th, 2011
8:05 pm

“Their portfolio consisted mainly of one stock…”

They probably heard about it in the “Lightning Round” on Cramer’s Mad Money.

TnGelding

May 12th, 2011
1:46 am

Better to be lucky than skilled. Do your homework. There are plentyof companies worthy of 100% investment. But most of us are too cautious for that. All diversification does is limit your losses AND gains. Dollar cost averaging is hard to beat. Also DRIPs.