Eighth graders show promise as investors

By Emily Richmond

Thursday, May 2, 2002 | 10:58 a.m.

Stock market whizzes Phil Natale and Kevin Schlegel start their mornings by perusing the stock pages of the newspaper and catching the latest financial news on MSNBC. The business partners, who together nearly doubled an investment of $100,000 in just 10 weeks, jot down notes on which stocks look promising and which should be avoided.

Their days could become more lucrative once Phil, 14, and Kevin, 13, finish the eighth grade at Greenspun Junior High School in Henderson.

Together Phil and Kevin beat out 17,000 other students -- from elementary to high school -- in the 15th annual Stock Market Simulation competition, sponsored by the Nevada Secretary of State's Office. Students who participate learn about managing finances, economics and mathematics, John Mundy, executive director of the Nevada Council on Economic Education, said.

Their prize: trophies, though Kevin and Phil would have preferred the profits.

"I can wait a few years for that, I guess," Kevin said. "I'm going to keep following the market so I'm ready to go."

Phil and Kevin were coached by Ron Smith and Chuck Michelson, the Greenspun teachers sponsoring the after-school stock market club. Students were allowed to make up to 100 transactions during the 10-week period, Mundy said, a cap set to discourage day-trading. Day traders sometimes buy and sell stocks hundreds of times in a single day in an attempt to speed up profits, he said.

"We wanted our students to develop a game plan for the long-run," Mundy said. "They learn to be responsible for their own financial futures."

The most successful team in the competition's history came from North Las Vegas in 1999, when students turned their $100,000 investment into more than $900,000 buying and selling high-tech stocks, Mundy said.

Phil, who has been following the stock market for several years, said he has learned to trust his intuition when it comes to picking winners. Kevin, who joined the school's stock market club this year, prefers more tangible approaches, such as researching a particular company's strengths and weaknesses.

"You have to be prepared," Kevin said Wednesday. "There are times when your plans go through and you win big, and there are times when it doesn't work and you get really hurt."

The boys won big buying stock in Pennzoil when shares were in the low $40s before climbing to the low $60s. But don't assume they picked the company because of an interest in NASCAR -- it was the Pennzoil's pending sale to a larger corporation that attracted Kevin and Phil.

"Stock market games are a great way to expose kids to the way the world works," said Tom Gardner, who along with his brother David founded the Motley Fool, a personal finance company that offers strategies and guidance to small investors. "Kids realize learn that for every television show they watch, every game they buy, there are companies competing for their attention."