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Market camp teaches bear necessities

August 21, 2000

 

By Adam Shell

USA Today

WALTHAM, Mass. -- It's Day 3 of Wall Street 101, a summer camp designed to teach high schoolers how to master the financial markets. Fifty-six teens are crammed into a lecture hall at Bentley College. They're getting a stern lecture from camp director Jahangir Sultan. The topic? The perils of day trading.

"Repeat after me: I will not day trade," booms the no-nonsense, dead-serious Sultan.

The students shout back: "I will not day trade!"

But day trade they will. Fast-forward 10 minutes to a trading room, replete with stock ticker, 30 electronic trading stations and two TVs tuned to CNBC. Here, campers get ready for a real-time day- trading simulation. Sultan, a finance professor at Bentley, hopes the kids will learn how tough it is to make money trading in and out of stocks quickly. He says 90% of day traders lose money.

Adam Hirsch, an incoming senior at Notre Dame High School in Fairfield, Conn., is intent on making a fast buck. "I'm a risk taker," says Hirsch, 16, sporting a Nike T-shirt and a buzz cut.

Flush with $1 million in play money, Hirsch intently studies a computer screen crammed with stock charts and prices. At 9:30 a.m., a bell signals the start of trading. At 10 a.m., Hirsch snaps up 100 shares of Yahoo with the click of a mouse. Nine clicks and $257,000 later, he owns 2,000 shares of the volatile dot-com stock. His average price: $128.50. "It's a crazy stock," he says.

Hirsch talks the stock higher: "Go Up! Up! Please, I'm begging." The stock obliges, and climbs to $129.50. "There it is, sold," says Hirsch, dumping all 2,000 shares and pocketing a $2,000 profit in less than 5 minutes.

His high is short-lived. At the end of the 50-minute simulation, Hirsch is down $2,500. "This is like Black Tuesday," he grumbles. He's not alone. Half of the other campers also lost money.

No walk in the woods

Forget camps that teach how to slug home runs like Mark McGwire, score goals like Wayne Gretzky or walk a balance beam like Olympic Gold medalist Shannon Miller. Today, many high schoolers think it's cool to calculate price-earnings ratios, analyze balance sheets and trade stocks online. "I've always been into Wall Street," says Monik Mehta, a 17-year-old from Weston High School in Massachusetts who analyzes stock charts online, feeds his dad stock tips and knows CNBC anchor Ron Insana by name. Mehta says investing in stocks "is like an energy boost."

"These are the next-generation traders, analysts and money managers," says Sultan, referring to the campers who paid $500 for a week-long stay at the first-ever Wall Street 101 camp sponsored by Bentley College.

Thanks to a booming bull market, Wall Street has become a big part of our culture. The earlier kids get exposed to the financial markets, the better, says Claude Cicchetti, a managing partner at Beacon Global Advisors and a camp guest speaker.

Wall Street 101 feels more like exam week at college than summer camp. Days start at 8 a.m. with a discussion on business news headlines. Next comes a 50-minute lecture on topics ranging from bond valuations to options. Hands-on labs follow. Campers learn how to use spreadsheets and financial Web sites and trade stocks and bonds in real time. Then it's another lecture about mutual funds and how to value stocks. After lunch, more lectures and labs.

From all walks

So what type of kid would attend a camp touting the benefits of international diversification, instead of one that focuses on paddling a canoe down a lazy river? All different types, it turns out:

Ø Alex Ioannou, 17, a hip-hop fan and hockey player who trades stocks online via his dad's online brokerage account. "I really got interested in the market during the initial public offering craze when stocks were jumping 600% in a day," says Ioannou, a senior-to- be at Acton Boxboro High School in Massachusetts.

Ø Chi Bui, 17, a fan of Alan Greenspan who does stock simulations at school and wants to be an economist. "I love number crunching, problem solving and analyzing things," says Bui, who's getting ready for her senior year at Taconic High School in Pittsfield, Mass.

Ø Noah Gunn, 17, a cross-country runner who talked his parents -- both ministers -- into scraping up the $500 tuition after learning about the camp during a visit to Bentley. "It was a tight crunch," says Gunn, who attends Minnechaug High School in Hampden, Mass. Gunn's motivation? He figured he should learn more about investing in stocks after losing a third of a $1,500 investment. "I threw money into the market with no real knowledge," he says.

Ø Christina Gillies, 16, a Mozart fan who throws the shot put, javelin and discus for South Portland High School in Maine. "I'd really love to work on Wall Street," she says, while analyzing the income statement of aerospace giant Boeing on MSN.com. Still, she doesn't think she has what it takes to be a trader. "It's too hectic," she says. "I'd probably have a heart attack."

Ø Chris Wong, a 17-year-old who idolizes Microsoft Chairman Bill Gates and says one of his favorite things to do is watch the war between PC rivals Dell Computer and Gateway. "The stock market is mysterious," he says. "It's an unknown. Your objective is to figure it out, manipulate it, understand it."

Getting teens to understand all facets of the financial markets is the camp's goal, says instructor and former bond trader Jainen Thayer.

Don't let the camp's name fool you. This camp favors brains over brawn.

Campers like Cassandre Petit-Frere, 15, who were expecting to learn the ABCs of finance, were confronted instead with terms like efficient frontier, arbitrage and hedging. "They're throwing a lot of information at us quickly," Petit-Frere says. "It's confusing."

Sultan concedes it's challenging: "We didn't want to dumb it down."

For fun, the kids watch Wall Street-related movies such as Boiler Room and go on field trips to places like Harvard Square and the Boston Stock Exchange. While the teens say they're having a blast, they admit it's more about work than play. Many say it will look good on college transcripts and provide an edge in an increasingly competitive world.

Says Bui: "My sister asked me, 'Are you going to sit by a campfire toasting marshmallows?' I said, 'Not quite.' "

 

A day at the camp

8-8:30 a.m. Morning meeting
8:30-9:20 a.m. Lecture: The dangers of day trading
9:30-10:20 a.m. Simulation: Trading real-time equities
10:30-11:20 a.m. Financial Web sites/Excel overview`
11:30 a.m.-12:20 p.m. Bond valuations
12:20-1:30 p.m. Lunch
1:30-2:20 p.m. Financial analysis/stock selection software
2:30-3:20 p.m. Simulation: Trading real-time bonds
3:30-4:20 p.m. Ethics in finance
4:30-5 p.m. Video: Billion Dollar Day
5-6 p.m. Dinner
6-7:30 p.m. Sports (swimming/weight lifting)
7:30-9:30 p.m. Movie: Boiler Room

Copyright 2000, USA TODAY. Reprinted with permission.

BENTLEY UNIVERSITY is one of the nation’s leading business schools, dedicated to preparing a new kind of business leader – one with the deep technical skills, broad global perspective, and high ethical standards required to make a difference in an ever-changing world. Our rich, diverse arts and sciences program, combined with an advanced business curriculum, prepares informed professionals who make an impact in their chosen fields. Located on a classic New England campus minutes from Boston, Bentley is a dynamic community of leaders, scholars and creative thinkers. The Graduate School emphasizes the impact of technology on business practice, in offerings that include MBA and Master of Science programs, PhD programs in accountancy and in business, and customized executive education programs. The university enrolls approximately 4,100 full-time undergraduate, 140 adult part-time undergraduate, 1,430 graduate, and 43 doctoral students. Bentley is accredited by the New England Association of Schools and Colleges; AACSB International – The Association to Advance Collegiate Schools of Business; and the European Quality Improvement System, which benchmarks quality in management and business education. For more information, please visit www.bentley.edu

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