|  FEB 1988

Students select a winning portfolio by Michael Scott

Students select a winning portfolio by Michael Scott Can high school seniors on a college prep track outperform leading investment advisors and mutual fund managers? Based on the following evidence, the answer must be an unqualified ""yes."" The underlying reason for this classroom success is that college prep students are bright, perceptive, objective and follow instructions carefully. I suspect they also have implicit faith in a good instructor. This investment experiment was the outgrowth of a unit on American capitalism in a senior social problems class. I felt that college prep students should be exposed to the financial page of a good daily newspaper and learn how to read it intelligently. One hour was devoted to explaining the symbols and terms of the New York Stock Exchange listing. At the end of the class period, I asked the students if they would like a short course on how to select a sound stock with promising potential for growth. The answer was an enthusiastic and overwhelming affirmative, and thus we started our experiment in the stock market. In an experiment of this nature it is important to set simple and limited criteria to ensure uniformity and a measure of objectivity. I told the students I could justify only two 50-minute class periods for this assignment. Therefore, they would have to listen carefully to a 35-minute explanation of the criteria and devote the balance of the time to selecting one stock they felt best met the criteria. They were to wrap up the assignment by recording their data and submitting their individual stock selections to me.

by Michael Scott