2.10.16. Stock Market What is a stock? o Represents a share in ownership of a company. o Profits increase when a company is doing well, and decrease.

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Presentation transcript:

Stock Market

What is a stock? o Represents a share in ownership of a company. o Profits increase when a company is doing well, and decrease when a company is failing.

What is a stock exchange? A public market where stocks are sold and bought between brokers (buyers) and traders. The most famous stock exchange is the New York Stock Exchange (NYSE) on Wall Street in New York City. A stockbroker is someone who buys and sells stocks in stock exchanges.

Your goal today is to make as much money as possible to live out the Roaring Twenties to the fullest. Your team will begin with $1000 to invest and buy stocks. Work together with your team to make decisions. Each stock costs $100. You may invest everything in one company, or in many.

You will compete to make the best investments and gather the most wealth At the end of the game, the team with the most $$$$ wins a prize

1.Get in groups of 4. 2.Come up with a team name. 3.Review the stocks with your team. -Decide which ones you think will go up in value. -Decide how many you want to buy of each stock (they’re $100 each to start).

See the “Stock Purchase Record” You will fill out one of these for EACH type of stock you want to buy You’ll bring it up to me, along with your “payment”, and I’ll give you the stock! After 3 min, we’ll see which stocks went up and by how much

You have five minutes to buy or sell.

Company/StockCost of each stock Kroger$100 Radio Corporation$100 Mammoth Oil$100 Durant Motors$100

OutcomeNew Market Share Kroger: purchases new food chain$120 Radio Corporation: new antenna model $130 Mammoth Oil: 9 new wells drilled$140 Durant Motors: defaults on bank payment $70 Calculate your wealth! -Add up the value of your stocks -Figure out what (if any) cash you have left -Total it up!

You have five minutes to buy or sell.

OutcomeNew Market Share Kroger$120 Radio Corporation $130 Mammoth Oil$140 Durant Motors$70

OutcomeNew Market Share Kroger: merges with Eastern stores$150 Radio Corporation: purchases 15 patents $140 Mammoth Oil: largest oil field in US discovered $190 Durant Motors: competing with Ford$50 Calculate your wealth! -Add up the value of your stocks -Figure out what (if any) cash you have left -Total it up!

Buying on margin! You only put 10% of the cost down You pay the stockbroker 90% of the cost after the stock goes up

You have five minutes to buy or sell.

OutcomeNew Market Share Kroger$150 Radio Corporation$140 Mammoth Oil$190 Durant Motors$50

WEDNESDAY, OCTOBER 23, 1929: Home construction, an indicator of prosperity, is at an all time low. It is rumored that the a major company intends to sell 12 million shares of common stock at a loss, before interest rates change. The Bank announces that margin buyers of stock are being notified that they must put up more money to cover today’s losses.

Thursday, October 24, 1929

OutcomeNew Market Share Kroger$30 Radio Corporation$20 Mammoth Oil$10 Durant Motors$40 Calculate your wealth(?) -Add up the value of your stocks -Figure out what (if any) cash you have left -Subtract your debts -Total it up!

OutcomeNew Market Share Kroger$10 Radio Corporation$5 Mammoth Oil$5 Durant Motors$5

1. What was the purpose of this simulation? What happened to most people in this game? 2. What did you learn about the stock market in the 1920s? 3. How did buying on margin contribute to the stock market crash?