LONGMONT — With the stock market starting 2003 much like it ended 2002, it never hurts to have some good advice.
“I figured, why stay in when it’s going to be going down? Why not sell before it goes down, wait for the bottom, and then ride it back up again?”
Helpful hints from a CNBC sage? Money-wise advice from the top analyst at Fortune? No, that would be Longmont High School’s Darrell Hammond talking.
“Some of the stocks that made me a lot of money also lost me a lot of money,” said the senior. “But if you’re losing money, don’t let it ruin your confidence.”
Hammond should know; he took $1 million and more than doubled it in the market — sort of.
As part of Fred Smith’s marketing class at the Career Development Center, Hammond and his classmates took part in a four-month play on the “virtual stock exchange” (www.virtualstockexchange.com). Smith set the class up as a competition, and each of the students got a “virtual” $1 million to play the market.
Smith set up the dollar limits and the cost-per-trade — the broker’s commission — that they would pay on each transaction.
During the four-month period of the game — from last September to December — Hammond parlayed his $1 million portfolio into a net worth of $2,164,000. Multiplied out, that’s a 650 percent annual rate of return, the best in the class.
Besides teaching his students the basics of the stock market, Smith also had them do extensive research on the companies in which they were interested in investing. Using MSN’s “stock research wizard,” the neophyte analysts soon found themselves digging into heady territory: P&E ratios, stated versus market value, and how companies fare comparatively to others in their own industry.
“At the beginning, I was involved in a whole lot of different companies, but I found out it was too hard to keep track of them all,” Hammond said. “It’s easier to keep track of a few stocks than, like, 20.”
Always mindful that “you haven’t lost money until you actually sell the stock,” one of Hammond’s shrewdest moves involved one of the world’s biggest companies.
“It was a lot of looking what was going on with the company at the time,” Hammond said. “Like when Disney released ‘Treasure Planet’ — it just bombed, and the stock went through the floor.”
“I think you were laughing at people that had Disney,” Smith reminded him.
“I got out,” Hammond said with a grin. “I was just chillin.’”
Hammond said he’s always had an affinity for numbers and economics, but his first love lies with political science — he said he wants to be an attorney. He also enjoys psychology.
“I’d like to see if I can find something where I can roll those three things together without going to school for, like, 50 years,” Hammond said.
The stock market fits right in with Smith’s vision of what an effective marketing class should be teaching, he said.
“I like marketing to be a diverse look at the business world, rather than just the advertising arm, which is what I think most people associate (marketing) with,” said Smith.
He said that 10 out of 30 of his students last semester were able to earn more than a 10 percent annual return on their investments playing the stock market game. Other students who had outstanding ROIs — returns on investments — were Skyline freshman Mike Wiegand, whose investments translated into a nearly 63 percent annual rate of return, and Eric Rusaw, an LHS senior whose annual rate of return was nearly 50 percent.
Tony Kindelspire can be reached at 303-776-2244, Ext. 291, or by e-mail at