Stocking up: Finance students participate in real-life stock market for class

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Article written in February 2013 for the 2012-13 edition of the Warbler, the yearbook at Eastern

Tucked away in Lumpkin Hall sits one of the most high-tech rooms on Eastern’s campus: the Securities Analysis Center.

It’s set up like a boardroom with a long table in the middle and computers along one wall. Above the computers is a classic stock ticker, with italicized information speeding by in red, green, and orange dots.

It’s 20 minutes delayed from real time, but Cheryl Noll, the chair of the School of Business, said it’s acceptable.

“We could get a 20-second delay, but it would cost us an astronomical amount of money,” Noll said. “The 20-minute delay costs us enough. It is a lot of money that goes into the hardware and the subscriptions.”

There’s also a video wall of four flat-screen monitors with constantly updated information about the class’s current stock holdings, along with news updates about the business world.

Saved for one of the final electives for finance majors, students in the 4000-level class — Applied Securities Analysis — work in the classroom just as a company would in buying and selling stocks.

Sometimes, Noll said, if there’s a high demand for the class, students must be selected in order to be enrolled.

“They have to have a real desire to be in the class because it’s a really difficult class and the students have to work all the time,” Noll said. “There’s no time off.”

Students follow the stock market throughout the semester and make decisions about what stocks to keep in the class’s portfolio, or collection of investments. They are advised and expected to check financial websites daily and are encouraged to have subscriptions to publications like The Wall Street Journal.

“There’s no real downtime throughout the semester,” Noll said. “There’s a huge commitment on the part of the students to be in the class.”

The EIU Foundation has allotted a set amount of money for the class, and every time it ends up just a little above what it had when the semester started, Noll said.

“They’re not making millions of dollars or anything like that,” Noll said. “But it’s really just the experience that they have doing it.”

The faculty member in charge of the class for the given semester is the one with the power to buy and sell stocks — but he or she does it at the command of the class.

“We have a brokerage account and I have the password to get into the real account and the trade, but I do not make any decisions by myself,” said Crystal Lin, the professor teaching the class in Spring 2013.

The class breaks up into teams that focus on certain stocks and give presentations about why a certain stock should be bought or sold, and the class votes to make the decision.

Lin said one of the first assignments is to research stocks from the previous semester and make presentations on whether to hold or sell the stocks.

From there, the only other buying and selling comes about midway through the semester.

“The most important thing for the class is for them to evaluate current stocks and propose new stocks,” Lin said. “But we also do something else, like analyze the general economy.”

Not only that, but the class participates in an Internet-based stock market, said Kelly Scaramella, a finance major.

“We get to invest in whatever stocks we want,” Scaramella said. “We are given a million dollars each through an online simulator and we compete against everyone in the class to see who can get the highest return by the end of the semester.”

Noll said the class is one that’s success depends on the effort of the students.

“Some students can just go through it and say ‘oh it’s very interesting’ but other students who really love this stuff will spend an awful lot of time the in the Securities Analysis Center and put a lot of effort into it that goes above and beyond,” she said. “Those are the ones who are prepared and want to move into these analyst jobs when they graduate.”

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