Thomas Marchionna, of Wilmington, and Ethan Fox, of Halifax, created a portfolio team along with five others in the school. While all but two other teams lost interest in the first few weeks of the 10-week-long game, Marchionna and Fox kept at it through an unending amount of highs and lows, and buying and selling. It wasn’t until the last week that they struck gold, finding success in an alternate route, one found through weeks of trial and error.
The Stock Market Game is offered for free to Vermont schools by the CFA Society of Vermont and is administered by University of Vermont economics professor Art Woolf. Twin Valley teacher Dave Kolkebeck has been the school’s advisor for the game for 10 years, and has never seen a game winner come from TVHS. Teams are given $100,000 to use to buy stocks and can borrow up to $100,000 more, and are charged commission on buying and selling. Right off the bat, Marchionna and Fox began the game ranked in the 200s due to their decision to buy stock in American Airlines.
“During the first couple of weeks it was a new idea to us and we began to panic,” said Marchionna. “When things went down, we sold them, and when they went up again, we panicked and bought them again.”
It was at that time that Fox decided to hand over the reins of the portfolio to Marchionna, who began to feel out a new company, Intercept Pharmaceuticals. During the seventh week of the competition, Marchionna used Google to look up momentum stocks and saw that Intercept was due for a big drop. So instead of avoiding the stock, Marchionna decided he would short-sell it instead, which, in other words, had Marchionna buying shares and essentially betting that the stock would plummet. Intercept would indeed plummet, then plummeted some more along with the rest of the biotech industry that week, springing him and Fox into first place in the competition, and making them a cool $18,000 in profit. This gain in 10 weeks translates to about a 90% annualized return.
“The Thursday before the game ended, the stock market was doing poorly,” said Marchionna. “Everyone dropped the amount of money they spent but me, but I gained just enough money to put me into first place.”
While the game teaches students about how stock investment works, Kolkebeck, who has taught economics classes at TVHS in the past, stresses the importance of making wiser decisions than the game encourages. “I told them, ‘The way to win the game is the opposite of what you really ought to do in real life,’” said Kolkebeck. “Real life is about long-term investment, never selling short, and never borrowing to buy shares, and Tommy played the game exceptionally by doing everything he shouldn’t do in real life. In real life it could have gone the other way and he would be destitute.”
Still, the thrill of learning how some investments are made, wise or not, was not lost on the winning team. “The game was interesting, I would like to do it again,” said Fox. “It was like a real-life situation we could work on before real life.”
“When we bought and sold AA we were in dead last,” said Marchionna, “When you get into high numbers it gets exciting, as you get into the 30s, and then you drop down it’s awful, and you hate it and then you go up again and then lose it again. But I want to win all four years.”
Another twist to the game is Woolf’s 5 x 5 x 5 requirement. To diversify the challenge, this calls for $50,000 to be invested in at least five different companies by the fifth week of the game. The winning team that met that requirment would win a $25 Amazon gift card, but because Kolkebeck didn’t expect one of his teams to satisfy all the criteria, he offered $25 out-of-pocket should one of his teams come in first place. Sure enough, on Wednesday, Kolkebeck showed his winner the money.
“The stock market game gives many lessons on what not to do,” said Kolkebeck, “but that one buy-in on Intercept was nothing short of astonishing.”