Do Now What do you know about the stock market? If you could invest (buy stock or a part of a company) in any company, which one would you choose? Why?

Role-Playing the 1920s

What is a Stock? Represents a share in ownership of a company. Profits increase when a company is doing well, and decrease when a company is failing. Called a “Share of stock”

What is a stock exchange? An open market where shares of stock are bought and sold. The most famous and busiest stock exchange is on Wall Street in New York City: The New York Stock Exchange (NYSE) A Stockbroker buys and sells stocks on this marketplace.

Buying on Margin Borrowing money to buy shares of stock Increases your ability to own more shares of stock without fully paying for it at first HIGH RISK  HIGH REWARD Today, if you give the bank $10, they will give you a $100 loan to buy shares of stock. You must pay them back eventually….

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 (8 $100 bills and 20 $10 bills) to invest and buy shares of stock. – Work together with your team to make decisions. – You may invest everything in one company, or in many. – The winning team will receive a prize!

How it’s done! Buying Stock: Mr. Kennedy and Ms. Sher are today’s stockbrokers. When the stock exchange is open, you will have five minutes to buy or sell stock from the stock brokers. Taking out loans: You can also use this time to go to the bank and get a loan.

Procedures in the Round Each Round you will: 1.Decide which stocks to buy or sell 2.Decide if you need loans 3.Collect loans 4.Buy stock 5.Record your purchases 6.When the new price is revealed, calculate how much money you made! 7.Record this amount on your Investment tracker

Group Roles CEO- speaker and group leader CFO- manages cash/loans/stock CIO- manages the investment tracker COO- timekeeper

The Companies! These notes are already in your packet But start thinking about which companies you want to buy shares of stock in.

1920s Companies Kroger Foods – A newly established regional food processing company. It deals basically in fruit and tomato products. It has recently offered share to the public and it has been listed on the exchange for just one week. – If successful, Kroger Foods could be an excellent money maker with national markets, however food industries always depend on good crops.

1920s Companies Radio Corporation This company has long been considered one of the better buys in the field of electronics. Market experts see this corporation as a good, long term investment, which is safe and provides security for its stockholders. The future of Radio Corporation will depend on its new models.

1920s Companies Mammoth Oil Owned and operated by Harry Sinclair who is rumored to have the backing of influential government employees. Mammoth has borrowed large sums of money to explore for oil. The value of Mammoth Oil stock has fluctuated between 20¢ and $5 a share for the past two years.

1920s Companies Durant Motors This corporation was founded by a carriage maker in Flint,Michigan. The company is attempting to produce a low cost car and plans to produce a car with a “self starter.” Durant Motors presently produces the Locomobile, the Durant-Four and the Flint.

1920s Companies Kansas-Pacific Railroad The K&P has been in existence for over 60 years. While many railroads are faced with declining profits, the K&P shows a steady increase. They are presently expanding into the Southwest and plan to extend their holdings into Mexico.

1920s Companies Tel-Tone This telephone company is just beginning. This is their first public offering of stock. They presently plan to manufacture a dial- telephone. This process reportedly will revolutionize the use of the telephone. Their management is young and inexperienced.

Example Market Price begins at $100 1.Buy for $100 cash 2.Take out a loan from the bank: – Pay $10, get $100 loan – Buy a share of stock for $100

Investment Tracker Company Opening Price Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Kroger 100 Radio corporation 100 Mammoth Oil 100 Durant Motors 100 Kansas-Pacific RR 100 Tel-Tone 100 Total

Stock Market Opens You have five minutes to buy or sell.

Stock Exchange Closes

Option to Pay Back the Bank You have 3 minutes to decide.

1920 OutcomeNew Market Price 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 Kansas Pacific: Expanded to Southwest$90 Tel-Tone: Dial telephones installed in NYC$150

Investment Tracker Company Opening Price Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Kroger Radio corporation Mammoth Oil Durant Motors Kansas-Pacific RR Tel-Tone Total

Stock Market Opens You have five minutes to buy or sell.

Stock Exchange Closes

Manage your business Option to Pay Back the Bank You have 3 minutes to decide and calculate your gains.

1922 OutcomeNew Market Price 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 Kansas Pacific: Agricultural shipments to Southwest begins $100 Tel-Tone: Greatest increase of any stock listed on the exchange $220

Investment Tracker Company Opening Price Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Kroger Radio corporation Mammoth Oil Durant Motors Kansas-Pacific RR Tel-Tone Total

Stock Market Opens You have five minutes to buy or sell.

Stock Exchange Closes

Option to Pay Back the Bank You have 3 minutes to decide.

Special News Bulletin President Harding is suffering from a seizure and is reported to be dying. You have two minutes to buy or sell instead of 5 minutes

August 2, 1923 President Harding dies. Calvin Coolidge sworn is as President. Stocks will close immediately Special News Bulletin

1923: Emergency Closing OutcomeNew Market Price Kroger$130 Radio Corporation$130 Mammoth Oil$160 Durant Motors$40 Kansas Pacific$90 Tel-Tone$190

Investment Tracker Company Opening Price Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Kroger Radio corporation Mammoth Oil Durant Motors Kansas-Pacific RR Tel-Tone Total

Stock Market Opens You have five minutes to buy or sell.

Stock Exchange Closes

Option to Pay Back the Bank You have 3 minutes to decide.

1927 OutcomeNew Market Price Kroger: speculation that Kroger may be taken $140 Radio Corporation: rumored merger with Edison company causes stocks to rise $170 Mammoth Oil: investigated by Congress for possible fraud $130 Durant Motors: Louis Chevrolet is hired to design a cheap automobile $100 Kansas Pacific: Drought in Southwest$100 Tel-Tone: J.P. Morgan becomes shareholder$220

Stock Market Opens You have five minutes to buy or sell.

Stock Exchange Closes

Option to Pay Back the Bank You have 3 minutes to decide.

1928 OutcomeNew Market Price Kroger: Agricultural surpluses$130 Radio Corporation: merger fails$140 Mammoth Oil: Sinclair charged with fraud$70 Durant Motors: Merger with Fisher Body creates General Motors $130 Kansas Pacific: New oil fields in Oklahoma$120 Tel-Tone: Fails to meet expectations. No explanation. $180

Investment Tracker Company Opening Price Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Kroger Radio corporation Mammoth Oil Durant Motors Kansas-Pacific RR Tel-Tone Total

Stock Market Opens You have five minutes to buy or sell.

Stock Exchange Closes

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

YOU MUST PAY THE BANK PAY BACK ALL OF YOUR LOANS

Stock Market Opens You have five minutes to buy or sell.

Auction! Decide with your team what to buy/sell and at what price Send the CEO to the stock exchange to sell stock Try to get as much money as possible. Trading Floor

CompanyCurrent Price Kroger Radio Corporation Mammoth Oil Durant Motors Kansas Pacific Tel-Tone

Stock Exchange Closes

Special News Bulletin Thursday, October 24, 1929

Black Thursday OutcomeNew Market Price Kroger$30 Radio Corporation$20 Mammoth Oil$10 Durant Motors$120 Kansas Pacific$80 Tel-Tone$60

Investment Tracker Company Opening Price Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Price $ * Share # Value ($*#) = Kroger Radio corporation Mammoth Oil Durant Motors Kansas-Pacific RR Tel-Tone Total

Exit Ticket What did you learn about the stock market? If you could do this activity again, what would you have done differently? Why?