Three local high school students are using their interest in the stock market to have fun with other young Warren Buffets while helping to improve financial literacy for Delaware kids in the process.
Wilmington Friends junior Kyle Nisbet, Archmere Academy senior Jessica Pei and Tower Hill Senior Sander Saridakis are spearheading the launch of the Delaware Stock Market Club to bring students together for hands-on learning experiences, including talks and workshops, and creating a new statewide investment competition where, naturally, the best-performing portfolio wins.
The founders have come up with a mission statement, established a website (https://www.destockmarket.org), and devised a timetable for educational programming. Their new group aims to inform people of all investment levels while piquing the interest of the younger generation.
Already six schools have signed on, including Tower Hill, Archmere, Wilmington Friends, Sanford, Tatnall and the Charter School of Wilmington, and participation by other schools is in the works.
Pei and Nisbet founded stock market clubs at their schools last year, and Saridakis is co-president of the Tower Hill club. The three started talking last spring about the potential for all of their members to learn more and invest wiser by sharing information, experiences and the sometimes painful lessons along the way.
“We all really enjoy following stocks. So, we wanted to motivate lots of other students to become interested in the stock market and excited about collaborating and learning from each other,” said Nisbet.
Pei says her involvement stemmed from years of participating in math competitions. “I’ve always been particularly interested in the probability problems. Naturally, this sparked my interest in the quantitative analysis aspect of the stock market, where I can best use my probability and statistics skills to conduct successful trading,” she said.
The Archmere senior added that the Delaware Stock Market Club leaders would like to see more discussion and value placed among teens on making wise financial decisions. “I hope that through our statewide initiative, we can promote financial literacy at an earlier age,” she said.
A simulated investment platform will allow each of the schools to manage and improve their portfolios for about six months, from November 1 — when the competition opens — to April when results will be tabulated, and a winner crowned.
Individuals or teams from participating schools can join the competition where they will be judged based on not only consistent returns but also the quality of their written investment strategies.
Between now and November, Nisbet, Saridakis and Pei will communicate with other student-led organizations in six participating schools to help them better prepare for the competition and to help the Delaware Stock Market Club leaders achieve their goal of educating and growing the community of young investors.
“We plan on sending the clubs educational materials, PowerPoints, videos and other materials to help them teach the basics to their club members. And then by November, we will also have some speakers and events all set up,” said Nisbet. Private equity investor and author Wayne Kimmel has agreed to come speak to students, with offers extended to others.
Saridakis says the goal of Tower Hill’s club is to familiarize and inform kids about the market and how to succeed as an investor.
“We literally engage in market research and stock market analysis and manage our own simulated investment portfolio. We read news articles about companies and try to do some firsthand research, and we talk about various scenarios that would drive a stock value up or down,” he said.
Saridakis gave an example of a recent attack in Saudi Arabia that “wiped out half of their oil supply. We looked to see how it would affect the price of oil, the cost of plane tickets and seeing how companies like Delta or American Airlines might be affected by this attack,” he said.
So what are these young investors buying? Saridakis says it depends on the goal. “We do have some big-name stocks that traditionally do well. But we also picked stocks like Apple and Etsy to invest in that would allow us to play the market differently. Stocks like those let us employ long and short options,” he said.
In the Delaware Stock Market Club competition, each school will start with the same amount of money and manage their own simulated portfolio.
The competition will use the Investopedia.com platform and will start in November and conclude in the spring. Nisbet, Pei and Saridakis will judge the competition, so, they won’t compete.
Saridakis says he has no illusions that all of his club’s picks will perform well. “When you invest in a stock, especially in our Tower Hill club, people present very convincing arguments as to why their stock would make money and be a smart investment. But it can be really frustrating when the market doesn’t react the same way we predicted it would. That’s when we look back and ask, ‘where did this go wrong?’”
Each participating school will add a second portfolio of stocks into the Delaware Stock Market Club competition, doubling the number of stocks they currently manage.
Interested students can contact the Delaware Stock Market Club founders through their website.