Bob Johnson

The Iola Register

IOLA (AP) — Two months ago, Eli Battles didn’t know the difference between a trend line and a hemline.

Now, the Iola Middle School seventh-grader knows that a trend line is a stock market term and that when the line consistently is headed upward it’s a good thing. A hemline? Well, he is a boy and he does notice girls.

Battles and others who report daily to Roger Carlin’s social science classroom at IMS are taking a hands-on approach to learning about the stock market by making phantom purchases. Carlin means to use the current financial madness as a source for lessons, including how President Obama’s stimulus package and other fiscal policies affect not only the market but also American society.

Students watch the markets to see how stocks respond to external stimuli, such as news stories about Citibank or Detroit’s Big 3 automakers or banks going belly up. The daily news has taken on new meaning for the students.

Putting the lessons in game form is a fun way to pique the students’ interest, Carlin said. The game aspect is a statewide project through the Kansas Council on Economic Education, headquartered in Wichita. Enrollment cost is $10 per team.

“We had 20 teams (involving all 93 seventh-graders at the middle school) and I didn’t think we’d get to participate in the statewide contest,” which has click-of-a-mouse reports on how the 200-plus teams statewide are faring, Carlin said.

The cost, $200 for 20 teams, was prohibitive. Carlin then got a call. Someone in Wichita picked up the tab for the IMS teams, and they were in.

On a recent afternoon, an IMS team was leading the state, and had for several days. The five members had parlayed $100,000 (in mock money) into $132,000. Another Iola team was second.

“That can change in a matter of minutes,” Carlin said, giving the students a clear understanding of how fortunes can be made and lost at the whim of global finances.

Even so, members of the leading team — Battles, Connor Sigfusson, Tristin Seelye, Garrett Tomlinson and Jeremy Spears — were huddled around a computer, basking in their marketing expertise having them atop the 200 teams in the game.

The game has rules.

Team members may not invest in stocks when they dip under $5 a share and they are restricted to mainline issues. They don’t trade in commodities, although the high-flying IMS team made a good deal of its money on a gold stock.

“We bought 1,400 shares at $53 and sold for $73,” Battles noted.

During the time the team had possession of the stock, it got as high as $113 a share when gold, in commodity form, soared to $1,000 an ounce. More recently it was just above $900, its influence as a hedge investment slipping as Wall Street regained strength.

A nuance of stock trading led the team to buy into gold. Battles took to heart a tip from a member of another team and convinced his teammates to purchase it.

“Sometimes it’s just a crap shoot,” Battle said. This time the numbers came up in their favor.

Carlin has used the stock market game to encourage and tutor students for several years. Five years ago a team of Seth Walden, Kent Toland and Molly Riebel, all seniors today at Iola High School, won the state title. They capitalized on the meteoric rise of Google to turn a fictional nest egg into a fortune.

Carlin said his instruction went beyond the reaction of the stock market to national and international events. He also wants his students to learn how to trade stock and how such things as interest rate changes affect the market.

He makes money, albeit also fictional, from the game the students play, an aspect that adds realism.

“I collect a 2 percent commission on each transaction,” Carlin said, which has put $50,000 in his “bank account” since the game started in January. Also, students pay 7 percent interest on money they borrow.

“Later we’re going to learn how to sell short, so they’ll know how to earn money when the market is going down,” Carlin said. Short sellers assume they will be able to buy the stock later at a lower price.

Carlin said he had found the stock game a solid teaching tool, in large measure because it prompted students to take an interest in current news events and financial dealings that otherwise they might have avoided.

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