do now what do you know about the stock market? if you could invest (buy stock or a part of a...
TRANSCRIPT
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 sell2. Decide if you need loans3. Collect loans4. Buy stock5. Record your purchases6. 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 $1001. Buy for $100 cash2. Take out a loan from the bank: – Pay $10, get $100 loan– Buy a share of stock for $100
Investment Tracker
Company
Opening Price 1920 1922 1923 1928 1929
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.
• http://www.youtube.com/watch?v=icICQKBnV4M
Stock Exchange Closes
http://youtu.be/YYeC0mN6RIQ?t=10s
Option to Pay Back the Bank
• You have 3 minutes to decide.
1920
Outcome New 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 1920 1922 1923 1928 1929
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Kroger 100 120
Radio corporation
100 130
Mammoth Oil 100 140
Durant Motors 100 70
Kansas-Pacific RR
100 90
Tel-Tone 100 150
Total
Stock Market Opens
• You have five minutes to buy or sell.
• http://www.youtube.com/watch?v=qr6gOTEptWo
Stock Exchange Closes
http://www.youtube.com/watch?v=qr6gOTEptWo
Manage your business
• Option to Pay Back the Bank• You have 3 minutes to decide and calculate
your gains.
1922
Outcome New 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 1920 1922 1923 1928 1929
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Kroger 100 120 150
Radio corporation
100 130 140
Mammoth Oil 100 140 190
Durant Motors 100 70 50
Kansas-Pacific RR
100 90 100
Tel-Tone 100 150 220
Total
Stock Market Opens
• You have five minutes to buy or sell.
• http://www.youtube.com/watch?v=qr6gOTEptWo
Stock Exchange Closes
http://www.youtube.com/watch?v=qr6gOTEptWo
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 ClosingOutcome New Market Price
Kroger $130
Radio Corporation $130
Mammoth Oil $160
Durant Motors $40
Kansas Pacific $90
Tel-Tone $190
Investment Tracker
Company
Opening Price 1920 1922 1923 1928 1929
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Kroger 100 120 150 130
Radio corporation
100 130 140 130
Mammoth Oil 100 140 190 160
Durant Motors 100 70 50 40
Kansas-Pacific RR
100 90 100 90
Tel-Tone 100 150 220 190
Total
Stock Market Opens
• You have five minutes to buy or sell.
• http://www.youtube.com/watch?v=qr6gOTEptWo
Stock Exchange Closes
http://www.youtube.com/watch?v=qr6gOTEptWo
Option to Pay Back the Bank
• You have 3 minutes to decide.
1928Outcome New 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 1920 1922 1923 1928 1929
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Kroger 100 120 150 130 130
Radio corporation
100 130 140 130 140
Mammoth Oil 100 140 190 160 70
Durant Motors 100 70 50 40 130
Kansas-Pacific RR
100 90 100 90 120
Tel-Tone 100 150 220 190 180
Total
Special News BulletinWEDNESDAY, 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.
• http://www.youtube.com/watch?v=qr6gOTEptWo
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
Company Current Price
Kroger
Radio Corporation
Mammoth Oil
Durant Motors
Kansas Pacific
Tel-Tone
Stock Exchange Closes
http://www.youtube.com/watch?v=qr6gOTEptWo
Special News Bulletin
• Thursday, October 24, 1929
Black Thursday
Outcome New Market Price
Kroger $30
Radio Corporation $20
Mammoth Oil $10
Durant Motors $120
Kansas Pacific $80
Tel-Tone $60
Investment Tracker
Company
Opening Price 1920 1922 1923 1928 1929
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Price $ *
Share #
Value($*#)=
Kroger 100 120 150 130 130 30
Radio corporation
100 130 140 130 140 20
Mammoth Oil 100 140 190 160 70 10
Durant Motors 100 70 50 40 130 120
Kansas-Pacific RR
100 90 100 90 120 80
Tel-Tone 100 150 220 190 180 60
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?