7th-graders beat college students at investing

Westminster College honors students paid off a bounty owed to seventh-graders at Rowland Hall-St. Mark's School Thursday, as the young financiers not only out-spent — but out-saved — their competition in a stock-picking match.

"The way it turned out made it not a competition of who made the most, but who lost the least," said Ryan Hessenthaler, director of the Center for Financial Analysis at Westminster, as he enthusiastically announced the seventh-graders as winners of the contest.

Cheers from both teams rose above the sounds of a closing market just after 2 p.m., and the losers handed over 10 large pizzas, the previously agreed-upon prize.

The two groups set out to make a virtual profit eight weeks ago, after carefully selecting a stock portfolio with $1 million of capital to start each group. Honors students let the market sit, while their younger counterparts started selling off their shares in the end.

"We couldn't afford to hang onto it, because there was not enough time for it to absorb all the gains," said Austen Van Burns, 13. Her team, which was one of seven vying against the single Westminster team, purchased shares from Apple and had to give them up. She was disappointed that the contest ended so soon, she said, because she wanted to see how their choice would have played out in the end if they had held on longer.

Hessenthaler said that investors typically can't predict earnings in such a short term, because they often go for estimates over a year or more. "Over a six- to seven-week period, it was tough to know what was going to be a good investment."

For seventh-grader Blake Stott, it was a lesson learned: "It taught us that short-term investing isn't always a great thing," he said.

Throughout the holidays, the market stayed mostly flat, but toward the end of the contest, Hessenthaler said, the general market took a major downturn, resulting in losses for everyone.

Rigel Pharmaceuticals, which experienced a nearly 300 percent increase during the contest, turned out to be the top producer for the students, while Target stock went sour after the Christmas break, losing 9.5 percent of its value.

The contest ended Tuesday — which was one of the most volatile days the stock market has seen in a while.

Selling off stocks and transferring shares to cash proved to be a good strategy for the seventh-graders, who were all relatively new to the investment world.

The college students didn't adjust their portfolio throughout the contest, in order to test their risk. John Cook, economics major and Westminster investment team captain, said he was glad the seventh-graders won because "it was a good experience for them to learn how volatile the market is. It teaches them that you can do all the studying in the world and still lose money."

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