In a research paper dated June 9, Bloomberg Wall Street analyst Ellen Zentner wrote that millennials and Gen Z investors — those born since 2000 — will “provide an above-average boost to the economy over a 20- 30-year horizon.”
Zentner could have been writing about Sofia Bolen, 12, and Olivia Irwin, 11, sixth-graders at Seaford Middle School who had a stellar performance as virtual investors in the first fiscal quarter of the year, when they posted a 13 percent gain, despite initially taking a disastrous 40 percent hit.
The team of Sofia and Olivia won’t be hanging out shingles as brokers anytime soon. For one thing, they still have a few more years of school before they’ll be ready to take their seats on the Stock Exchange. But the pair took first place among more than 250 middle school teams in the SIFMA Foundation’s 14th annual Stock Market Game and Capitol Hill Challenge.
The performance was all the more impressive because experts like Wall Street titan Mike Wilson, of Morgan Stanley, predicted an earnings slump for the first half of the year, based on S&P 500 averages.
In the challenge, which has middle school and high school divisions and is organized according to congressional district, each team is given a hypothetical $100,000 to invest in stocks, bonds and mutual funds “to learn the value of the capital markets as they work together to maximize the return of their portfolios,” according to the SIFMA website.
“This program provides critical educational experiences to young people across America, emphasizing underserved schools and enabling students who otherwise might not be exposed to the capital markets to gain insights that lead to their success,” said Melanie Mortimer, president of the SIFMA Foundation.
Initially, Sofia and Olivia lost 39 percent of their working capital before regrouping and going on to score big with stocks like Apple and Ulta, as well as e-marketing behemoth Amazon.
“We made about $5,000 from Ulta” — a Bolingbroke, Ill.-based skin care and beauty-products company that also operates a chain of beauty stores — “and another $3,000 from Amazon,” Sofia said. The remaining $5,000 came from a variety of smaller investments, including Apple.
During the 14 weeks of the competition, the pair looked at about 30 different stock issues, Sofia estimated, becoming regular readers of The Wall Street Journal and Barron’s. They updated their portfolios with an eye to possible trades only on Mondays and Fridays, but they kept daily charts of their investments’ performance. “Yeah, we’re chartists,” Olivia said when asked about their investment strategy, which had them researching cyclicals, asset plays and acquisition targets like pros.
Both girls studied the market carefully, but they agreed that Sofia took the more active role as a stock picker.
The girls got involved in the stock market in a sixth-grade class called Smart Money, taught by science teacher Adam Cohen, which meets for 40 minutes every other day. Cohen earned an undergraduate degree in business at SUNY Oneonta but is now a biology teacher at the middle school.
This wasn’t the first time Cohen’s Smart Money class has produced a winner. Seaford High School senior Brian Rodriguez won the SIFMA Challenge in 2014-15 as a middle-schooler, and took top honors in the high school division in 2017-18.
Rodriguez’s approach to stocks was similar to Sofia and Olivia’s, he said. He researched according to category and then picked companies whose business models he felt he understood best. His big winners were mainly pharmaceutical companies.
“I studied the companies to see what they had in the pipeline,” Rodriguez said, referring to the development of new products. “When I thought a company had a winner, I invested.”
Rodriguez will attend Duke University in Durham, N.C., next year as a business major, he said, after which he hopes to earn a Master of Business Administration and become a consultant.
Despite the class’s successes, Cohen said that this was the last year Smart Money was offered, although he didn’t know why. “I’ll probably just be teaching science in the fall,” he said.
Sofia said she got interested because she simply wanted to learn more about finance. But for Olivia, the interest was more practical. “I work as a model and an actress and a dancer,” she said. (Her recent credits include BeautifulMode.com and various YouTube productions.) “I want to know how to manage my money.”