Recently, I had the opportunity to interview with a pharmaceutical company (Watson, now Actavis), and I have to say it was probably the most interesting one I’ve had. I didn’t just get asked basic questions that you hear at every interview. I was also asked questions like “Do you believe in aliens?” where I was able to discuss my interest in Michio Kaku, and another question which led to a short talk about evolution. However, the one question that stumped me was “What classes do wish your University had taught you that they didn’t offer?”
I sat in silence for a good two minutes (which felt more like 30) as my interviewers watched me. I was scared to come up with an answer because even though I had a bunch of ideas flowing through my head, I hit a nervous roadblock. I really couldn’t think of one because my university not only offered a class for circus performing, but also in rest an relaxation. What more could there be? Surely I haven’t learned everything there is to learn from my University, but I didn’t want to just come up with something dumb like “underwear modeling 101.”
A month later I came up with an answer: An entry level stock analysis class. The object of this class would be to help students get a better idea of what it is to actually invest, and research stocks (at least at a basic level). So lets get into the details of the class.
This will be a class to fulfill writing requirements that all universities probably have such as “having to write 3000 words by the end of the semester.” Each student is given “starting funds” of $100,000. This doesn’t seem like a lot of money, but keep reading, there is more to this.
The students will all be thrown into the period of 1965-1975. Why that time period? According to this chart – http://stockcharts.com/freecharts/historical/djia19601980.html I feel it gives students an opportunity to experience the stock market from a decade with many ups, and downs. I picked 10 years very specifically simply because Warren Buffett said “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” We are trying to teach the students long term investing, not speculation and day-trading.
Now there won’t be tests and quizzes in this class. It will be mainly focused on writing. I’ve done the math, and this should be one of those electives taken for 1 hour, 3 times a week, for ~14 weeks + the extra recitations. Every class period should be an interval of about 3 months where students must write something about their current portfolios, or a new buy, or just a simply analysis of what was happening during that time that they think might impact them. Example: If they start in January 1965, the next class will focus on April 1965, then July, and so on until whatever month they happen to land on in 1975.
The class must be small to allow for interaction, and a “lab” environment where students are given time to collaborate and discuss “industry news” of that time period. Sure there will be short lectures in each class, with little quips about investing, maybe historical data, an in depth analysis of various stocks throughout time, and how students should go about researching them, diversification, and various investment vessels.
From class one, and $100,000 students are required to go through the process of picking out whatever stocks they wish. Then they could use their own strategies to buy more or sell every three months based on industry news. They could even choose to hold on to this money if they felt there were no strong buys, but they must give a valid explanation on their choice.
So in summary:
Grades will be determined based on writing. How well you are able to express WHY you bought a stock, and how you analyzed it. Success will not be based on how your stocks performed in the market. Students should be told that they can “cheat” if they want to and just pick stocks that they know (due to obvious “foresight”) will succeed. They should also be told that it would defeat the whole purpose, and the students who truly take the class seriously, really try to research news articles, and do their own in-depth analysis of each stock they pick starting in 1965, are likely the ones who may become future brokers of Goldman Sachs.
Students will get bonus points if they write intriguing statements like “I sold X stock because I feel their strength in the marketplace decreased since I bought them because of stronger competitors Y, and Z who came out with better products A and B.
I don’t think this class would be a good idea in the present, simply because there is not enough time in 14 weeks to promote good investing habits. In 14 weeks any sort of investment is just mere speculation. Although I do see potential discussions during class about “current” trends and why students think they should invest.
Would you take a shot in this class?