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Do Now: What do you know about the Stock Market or Stocks? Objectives: Students will be able to...(1) describe how the stock market works (2) analyze a video clip for key information Agenda: 1.Stock Market 2.Stock Market for Dummies 3.Pamphlet 4.Crash! (No, not the Dave Matthews Song) Homework: Notes on Chapter 22, Section 1 DUE Tuesday (11/13)
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Some Key Terms Stock Market: System for buying and selling shares of a company Stock: Share or Percentage of a Company Bull Market: Long period of rising stock prices (Lots of buying) Margin: Buying on margin. Putting down small cash payment ($1,000 for $10,000 worth of stocks) Broker: Works at market making investments for people http://money.cnn.com/data/us_markets/ http://money.cnn.com/data/us_markets/
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The Stock Market for Dummies You will watch a brief 10 minute clip on how the Stock Market Works With three or four other people: You will make a pamphlet someone could use to learn about the Stock Market The cover can be a drawing or design The middle two sections must have information answering the following questions: How does a company get on the Stock Market? (Aka, how do they put stocks up for sale) How do people buy and sell stocks? The back must be a ‘caution’ – Use the Crash as an example and warn people about some of the hazards of the market
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Do Now: Summarize the picture below (Cite specific details)
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Objectives Students will be able to...(1) transfer knowledge about the Stock Market to a class activity (2) explain the basics of the stock market and how it collapsed Homework: Notes for Chapter 22, Section 2 due THURSDAY (11/15)
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CRASH!@!$#$%^$%!@$#%@#$&@$% Toward the end of 1929 market was running out of new customers Investors sensed danger and began to sell Margin Calls: Brokers demanding the money from customers on margin investments Frantic Selling: Lots of selling + little buying = Drastic drop in prices! October 24 th, 1929: Black Thursday (Enormous Plummet)
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Groucho Marx Actor who made a small fortune and invested in the stock market only to end up in debt described his broker the last time he went to see him: He was sitting in front of the now-stilled ticker-tape machine, with his head buried in his hands. Ticker tape was strewn around him on the floor, and the place…looked as if it hadn’t been swept out in a week. Groucho tapped him on the shoulder and said ‘Aren’t you the fellow who said nothing could go wrong?’ ‘I guess I made a mistake,’ the broker wearily replied. ‘No I’m the one who made the mistake,’ snapped Groucho.’ ‘I Listened to you.’ Quoted in 1929 after the Great Crash
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Black Tuesday October 29 th, 1929 Stocks lost $10-15 BILLION in value that day By mid-November, $30 billion lost (Almost as much as total wages earned by Americans in 1929) Stock Market collapse not the major cause of Depression, but strongly hurt economy
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Banks Banks lent money to speculators Eventually defaulted on loans Banks invested depositors money Lost money they invested Banks couldn’t afford to give loans Result: People/Businesses couldn't’t borrow money, which put economy in recession Large number of people went to withdraw money and banks ran out
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Cyclical Effect
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People bought things on Installment Plans (Pay in small increments) Later on, people stop buying things Companies don’t make $ Companies can’t pay workers people get laid off people don’t buy things
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