Webquest: Stocks

Introduction

Have you ever wanted to learn how make some money? If so, this is the right place for you. You and your team will pretend to invest $200,000 ($50,000 per member) in the stock market. Do you think you will do alright? Will you make a profit or will you lose money? Buying stocks is not as easy as it looks. It is important to research your prospects in order to ensure they are a good investment. You will have two months to make a profit. Let's see if you have what it takes to make some money!

The bottom line: If you take the time to understand a little bit about the stock market and research companies before you buy shares in them, you�ll do better in the long run than someone who just jumps in.

- Ilyce R. Glink

Task

You, and your team of three other students (4 total), have each been given $50,000 (team total: $200,000) to invest in the stock market. It is possible to invest your money in any stock, whether it is on the NASDAQ, AMEX, or NYSE. This project will last three months. You have to invest your $50,000 in at least five (maximum of seven stocks) stocks that are in different market segments (example: transportation, telecommunications, retail, etc.). You will track your stocks for two months. While tracking these stocks your team will pick four companies (one per student) in the same market segment and write a report about the segment and companies. An example of this could be the market segment of transportation with the four companies of Ford, Honda, General Motors, and Toyota. Feel free to use this idea, but project topics (both market segments and companies) will be approved on a first come first serve basis. Each group will have a different market segment. Also, your team will give a presentation to the class about the market segment and companies.

Process

Follow these steps to learn more about stocks and the stock market:

Step 1 - Define Terminology: Define the following terms. Please include the name of the book or URL of where you found the answers. There is a suggested list of terminology resources to help find the answers.

	AMEX					NASDAQ
	Bear Market				NYSE	
	Blue Chips				Preferred Stock
	Bonds 					Price-to-Earning (P/E) Ratio
	Bull Market				Profit
	Cash Flow				Return on Investment (ROI)
	Dividend				Revenues
	Dow Jones 30 Industrials		Sales
	Earnings Per Share			S&P 500
	Large Cap				Small Cap
	Mutual Funds				Stock

Also, find 5 other terms not on this list that have to do with the stock market.
Please define them.
					

Step 2 - Pick The Stocks You Want To Track: Your need to find 5 to 7 stocks in different market segments that you want to track over a two month period. The top two teams that make the most profit will receive extra credit, so pick stocks wisely (a total of 7 stocks may not result in the most profit). Team members must have different stock picks. Decide how many shares of stocks you want to buy in each company (try to use as much of your $50,000 as possible) based on the stock price on the day of purchase. The teacher will pick the day you will buy stocks. Turn in your stock picks and the number of shares you are going to buy. Also include the price of the stock at the time of purchase, and your company's ticker symbol.

Step 3 - Monitor Your Stocks: You are responsible for monitoring your individual stocks. Follow these instructions for keeping track of your stock. The teacher will go over this in class:

• Each stock should be tracked with the use of an Excel spreadsheet. Example 1 in the Product section shows what the spreadsheet for each stock should look like.
• You will be responsible for locating the following items at least twice a week:
• The closing price of each stock. Use the resource webpage to locate a good Internet source for finding the closing prices of your stocks. Since this is a two month project, you should have at least 18 days (purchase price, 16 closing prices, and the selling price/last day) worth of closing prices.
• The amount of change of each stock from the opening price to the closing price. (at least twice a week)
• You will also be responsible for calculating the following items:
• The percent change of the stocks' prices for each day you check your stock's closing price.
• Calculate the range, median, mean, and mode of each of your stocks. Base this information on the closing price of each stock. Only use the closing prices from the days you track.
• Calculate the gain/loss of each stock. Plus, calculate the percent gain/loss of each stock.
• For each stock you must create a Line Graph of each stock's closing prices. Example 2 in the Product section shows an example of a Line Graph.

As a team you will find out how much money you made or loss at the end of the two months. Also, as a team write a one page paper on which stocks performed well and which stocked performed bad over the two month period.

Note: Step 4 - Step 7 will be worked on at the same time.

Step 4 - As A Team, Pick a Market Segment: As a team, pick a market segment you would like to study. Make sure to clear the market segment with your teacher because each team has to study a different market segment.

Step 5 - Pick A Company To Study: Each member of the team must select a company within the market segment to study.

Step 6 - Annual Report And Financial Information: Obtain the most recent annual report from the company by either writing the company to request it, or by finding it online at the company's website. Look over the annual report and read the following information: history of the company, chairman's/CEO's message, and financial highlights. As a class, the teacher will go over how to use a company's annual report, and how to read financial information before completing the questions below. Please answer the following questions:

1. What is your company's latest reported revenues? Have it increased or decreased from the previous year?
2. What is your company's latest reported net income? Has it increased or decreased form the previous year?
3. If you owned a share of your company's stock, what would your cash dividend per share be?
4. Look at the reported share performance. What is the price per share of your company?
5. What is the earnings (net income) per share?
6. What is your company's Price to Earning's ratio (P/E) using per share data?
7. What is your company's Return on Investments?

The answers to these questions should be handed in to the teacher.

Step 7 - Write Reports: As a team, write a five page paper about your market segment. Include information such as the best performing companies in the market segment, future outlook, competitive markets, government regulations, and other influences. Also, each individual student will be responsible for writing his/her individual paper on the stock that you are studying in your team's market segment. This paper should be four pages long. Things to possibly include in this paper are: history of the company, future plans, forecast and outlook, financial information, products, size of company, international presence, and current news/press releases.

Step 8 - Presentation: Each team will give a 20 minute presentation on their market segment, individual stocks, and learning experience. This presentation should include the use of PowerPoint and the Internet. Also, please split the presentation up equally among group members.

Product

Here are some examples to look at for parts of this project.

1. Example of a spreadsheet for one stock. Click here.



2. Example of a Line Graph for one stock. Click here.

Evaluation

This project will be graded with a rubric, which can be found here.

There is also a checklist provided for students, click here.

Conclusion

Students: Please write a one paragraph conclusion about your learning process during this webquest.

The stock market is interesting; a person can easily lose money or make a profit. The key is to learn about investing money. This webquest only provides an introduction of what it is like to invest in the stock market. If you have any questions or suggestions feel free to email me, just click the email envelope that is at the bottom of each webpage.