Stock Market Crashes on Daughter’s Head

Friday, November 16, 2007

Page 15

AT THE SIDEBAR (Column)

Stock Market Crashes on Daughter’s Head

By J’AMY PACHECO

I’m no financial wizard. To me, a financial coup is getting an additional 15 percent off already reduced merchandise at my favorite department store.

I was, therefore, somewhat concerned when my 11-year-old came home from school and announced she would be investing $100,000 in the stock market. I soon learned that her sixth grade class would be participating in a months-long competition in which student teams would research companies, and then use virtual money to buy stocks. The winning team, she told me breathlessly, would get to travel to New York City, all expenses paid, to ring the opening bell at the New York Stock Exchange.

Why that made her breathless puzzled me, because before that day, I’m pretty sure she’d never even heard of the New York Stock Exchange. I was pretty sure she still didn’t understand what the Stock Exchange was. I reasoned it was the idea of getting to go to New York with her pals — for free — that actually appealed to her.

So she and her buddies formed a team, allegedly did some research – and bought stock in Hershey and Target. That made sense to me, particularly since the trades were made when the candy-and-retail primetimes of Halloween and Christmas were both still around the bend. For some reason, the girls also bought stock in Washington Mutual.

Washington Mutual thanked them for their support by immediately tanking. Target’s stock fell like somebody had put its big red logo to use. Only Hershey kept them from immediate bankruptcy.

Within weeks, my daughter told me with great embarrassment that her team had purchased more stocks and was not only ranked 10 out of 10 in their classroom, but was number 59 out of 60 teams competing. I noted with some satisfaction that the team they were beating was a high school team – as were most of the competitors – but my elementary school investor was devastated.

She told me she was thinking of dumping the low performing stocks. I suggested she hang onto them for a bit – not only to avoid having to pay more commissions for the trades, but because I figured as low as they were, the stocks could only go up.

She showed me her team’s portfolio. Despite my ignorance of stock marketing, even I knew the columns of red numbers and negative signs weren’t good. Unfortunately, I had no suggestions on how to improve her success. I asked what her team thought.

One member, she said, spent every stock market session saying, “We stink. We couldn’t stink any worse.” The other two spent their time discussing the “Artemis Fowl” book series and avoiding any discussion of stocks at all. My daughter felt abandoned.

She bought stock in a utility company. Not the one I pay every month, but one that actually managed to make a little bit of money for the team. She also bought stock in kid-appealing companies like Disney, Apple, and Nintendo (which is, as I write this, of course going down).

She was thrilled when her team moved up to number 54, and to number nine in her class. But her joy was short-lived; she soon discovered that they were back at the bottom of the class, and near the bottom overall. Adding insult to injury, she discovered that one team in her class currently occupies the number one slot in the competition.

Poor kid. I’m not sure which is more painful: being the worst investor in the entire class and most of the region, or having a mother who suggests you quit looking at your dismal portfolio and go see what’s on the clearance racks at the mall.

Frankly, I don’t know how to talk her off this window ledge. When she has trouble with algebra, I take the “phone a friend” option. Fortunately, I have a friend and a brother who are both very good at math. Regrettably, neither knows any more about the stock market than I do.

I tried to help in the only way I could. I found the nearest Super Target, and did my grocery shopping there. It had no effect, and I had no more ideas.

At this point, I’m afraid it’s hopeless. They’re so far behind that I don’t know how they can possibly improve their ranking before the competition ends. On the other hand, as far down as they are in the game, they can only get better.

If they finish last, I suppose I can always take them shopping as a consolation prize and let them honk the car horn on the way over.

That sounds like a good enough coup to me…