No one can say that what Lou Metallo is teaching his Niles West High School students has no practical value.
Metallo, who teaches the school’s investing class to sophomores, juniors and seniors, teaches them how to invest their money wisely. His students research companies, learn what to look for and gain financial literacy to help them navigate the debt-infested waters of young adulthood.
And they seem to be doing a pretty good job. Statewide, 1,825 high school teams competed in a fall stock market game operated by the Illinois Economic Educators Association, and Niles West had four teams of students in the top 10 in Illinois late in the semester. The Niles West students were averaging 5 to 22 percent above the Standard & Poor’s index for the same time period.
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Earlier:
Juniors Molly Kleppin and Jessie Simkins were ranked sixth at one point. They have chosen stocks by looking at the price-to-earnings ratio, debt-equity ratio and 52-week highs and lows. One of their favorites is Panera Bread – “I think we made $9,000 on Panera,” Simkins said -- but they also like Valco, an energy company.
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Sophomore Robert Ljubic was part of a team that was ranked first. In addition to the measures Kleppin and Simkins look at, he also listens to Jim Cramer, an analyst on CNBC’s Mad Money. His favorite pick so far is Sand Ridge Energy.
None of the students went into the class with ambitions of becoming a money manager or investment banker, but they are finding it more fun than they thought it would be.
Simkins said she plans to use what she’s learned to manage her own money as she gets older. “I’m looking towards this just as a way of staying on my feet,” she said.
She’s not alone, Metallo said. While the students start the stock market game with $100,000 in hypothetical money – with the ability to take out a loan of another $100,000 in hypothetical money—some students have told him that they are buying real stocks on their own. Others have said their parents are becoming interested in investing.
To spark their interest, Metallo allows them to watch him buy and sell on Ameritrade and shares his thoughts on the companies he is trading.
“They have to do a ton of different research on companies, and we do a lot of math,” he said. “A spreadsheet has been their best friend.”
In terms of advice, Metallo said, he tells students that it’s OK to be a little bit risky. They’re young, which is the time to make riskier investments, and besides, it’s not real money. Under the parameters of the game, each team must buy five stocks, and they must by at least 100 shares of one stock. Each stock must cost at least $5 a share.
“I tell them to take the extra $100,000 (as a loan) and spend roughly $40,000 each on five stocks,” he said.
