MKA's Economics Honor Students Put Theory Into Practice

The returns are in!  MKA Upper School students in Tom Carroll's Economics Honors classes participated in a yearlong investment simulation designed to help them learn about investment analysis and the capital markets.

The winner this year was senior Justin Gonsalves with a return of over 100%!  "To put this in context," notes Mr. Carroll, "the S&P 500 (a major benchmark against which professional money managers are evaluated) rose 14%.  Justin's strategy was to buy and hold large positions in stocks that he really liked rather than to engage in frequent trading.  His big winners were Netflix and Starbucks."

Mr. Carroll uses this simulation to help students learn the art of fundamental analysis.  Students learn to evaluate companies from a qualitative standpoint using such tools as Harvard Business School professor Michael Porter's "Five Forces".  They also learn how to evaluate a company's performance by examining financial metrics like revenue growth and P/E ratios.  Approximately 20% of this year's students were able to outperform the overall market.