SMG Assignment #5

            For the better part of my time in Econ, we played the stock market game. It’s essentially a free game that allows members to practice trading in a lifelike brokerage simulation.  By participating in the community, you can learn the ins and outs of Wall Street by investing virtual money.  This virtual stock market game features real-time trading simulation and multiple contests. Beginning investors can practice stock market trading, compete with friends and investors, In doing all of this, especially with a school like LMG where the kids could really competitive, this was about the only part of school I can remember having fun and learning at the same time. A couple of points that you learn fairly fast were:

 1) If you are going to try to win the contest then you need to swing for the fences and hope for the best since you have nothing to lose (since it is not real money). This is not a way to learn how to invest your portfolio.

 2) If you are doing short-term trading strategies then these kind of sites can be useful to see if your strategies work. Unfortunately for long term buy-and-hold investors - these sites are really only good for learning about actual orders (for example: buying with a limit).

3) History repeats itself on Wall Street

One of my groups biggest things we got to take away from this is we learned, after our failing first week, not to invest in mediocre companies just because we like the product personally.  It is by no means impossible to make a fair one-time profit from companies with a stationary or even a declining sales curve. Operating economies resulting from better control of costs can at times create enough improvement in net income to produce an increase in the market price of a company's shares. This sort of one-time profit is eagerly sought by many speculators and bargain hunters. It does not offer the degree of opportunity, however, that should interest those desiring to make the greatest possible gains from their investment funds.

            In conclusion this game could be fun or played serious. When you consult with your group to make these decisions with your money it makes you feel like a grownup addressing his peers as weird as it sounds. This assignment was one of the more empowering ones that gave us the choice making abilities. Some groups chose to listen to Mr Ryan and invest smartly and almost doubled their money for it. While other groups invested without any thinking and lost almost all of their money. Either way we learned a lot about the big scary world out there called wall street and this defiantly better prepared us for it.