How a business studies team of four young women won the JSE Investment Challenge for Schools

BY KYLE LAUF
Like plumbing, or Formula1 motor mechanics, most people have the perception that stockbroking is a career for men.

But four Grade 11s in my business studies class at Assumption Convent School in Johannesburg, successfully challenged this stereotype last year by winning the prestigious Johannesburg Stock Exchange ( JSE) Investment Challenge for Schools 2018.
The Grade 11 business studies curriculum is dynamic and relevant. It includes a section on forms of business ownership in which learners are exposed to the different ways entrepreneurs form companies. There are state-owned enterprises, personal liability companies, private companies and public companies, among others.

The basics of share trading

A public company is formed when its shares are made available to the public in an initial public offering (IPO) through a listing on the JSE. The strongest performing companies are called the
Top 40 and include well-known companies that are big contributors to South Africa’s economy – investing in the country, employing hundreds of thousands of people, and paying many millions of rand in corporate tax.
While teaching this section to my Grade 11 class, I showed a short video that explained the basics of share trading – buying
and selling of company shares and how this contributes to the economy in general. The video referred to the JSE investment game where participants would have a million rand of fictitious cash to invest and so learn the ins and outs of trading in shares.
This attracted my pupils’ interest. Immediately, a number of learners in the class asked if they could participate. At that point I thought we had missed the registration deadline, but persistent teenagers persuaded me to enquire and find out that they indeed still had time to enter. And so, Daniella, Daniela, Panita and Eleni formed a team to enter the challenge.
It proved to be a contest of researching, learning, discussing, thinking, and applying knowledge. It required curiosity, commitment, savvy, and the courage to follow through with your plans. As an educator aware of Bloom’s taxonomy of educational learning objectives,1 I realised this game included all of these in lower and higher order thinking activities.

Bulls and bears

The girls chose a bold name to express their confidence and excitement – the Bull Traders. A ‘bull’ market is a period of economic growth and profit-making, and if someone is feeling ‘bullish’ about their investment it means they expect the share price to rise. I had recently told them of the success of a company like Naspers and its shares, which had doubled within the timespan of about a year.2 This represented a profit of 100%: far higher than a fixed deposit bank account that might bring you 9% per annum.
Enthusiasm is a beneficial attitude to have when learning new things, and no one is as enthusiastic as the youth. The Bull Traders eagerly researched some of the available shares on offer, discussed their options with me and each other, and made bold investments within the rules of the game.
Unfortunately, the stock market is not always ‘bullish’. The symbol of a bear represents a struggling economy or a period of stagnation and decline, and South Africa has experienced many a bear market in recent years. In addition to this, stock markets fluctuate daily, with shares going up and down. Wise investors know they need a longer-term perspective to build investments, and time to ride out short-term storms.
Ominously, people’s real, hard-earned investments can be wiped out when shares plummet. Such was the case at the end of 2017, when the company Steinhoff collapsed.
Formerly one of the JSE’s reliable earners, the
Steinhoff crash hurt many investors including
individuals, institutional investors and even the
public investment corporation which buys shares
for government pension schemes. Its share price
lost over 90% of its value within a few weeks.3
The Steinhoff debacle would have an interesting
twist for the Bull Traders – but that would unfold
later in the year.

Staying connected and focused

In the meanwhile, the team went about researching concepts like returns on investment (ROI) and dividend yields (DY ). They needed to stay informed of news and current affairs while keeping an eye on exchange rates and the price of oil. The girls initially attacked this with relish. But their real success came because of the prolonged discipline required to keep up their focus for a full six months.
As it turned out, Assumption Convent’s Bull
Traders weren’t the only women successfully managing the pressures of stock markets. The Johannesburg Stock Exchange itself has been run by a woman, CEO Nicky Newton-King since January 2012.4 And in 2018 the New York Stock Exchange appointed its first ever woman president, Stacey Cunningham.5
In addition, the JSE Investment Challenge’s university team category was won by an all-female team from the University of Cape Town. Their prize? A visit to the ‘Big Apple’ and the New York Stock Exchange.
The Bull Traders learnt about taking risks – not foolish risks, but rather informed and calculated risks born out of processing and applying a constant stream of economic information to a coherent investment strategy.

Because the JSE investment game’s trading platform is fully accessible from a smartphone, team members could be found on their phones trading during break times, weekends and even school holidays. While typical teenagers might be more tempted to spend time with friends and trends on social media like Snapchat, Instagram or Facebook, these young women used a WhatsApp group to stay connected with each other while accessing the JSE’s online platform.
Because they were connected and able to play from anywhere, the girls were empowered to stay fully engaged in the challenge, even while lying on the beach during a holiday. And the winning trade could very well have come from buying heavily depleted Steinhoff shares and selling them when they made a small gain. This kind of game-winning decision-making combined a shrewd appreciation of a company’s share price over an extended period of time, and the courage to take a risk and trade it.

Taking calculated risks: a 21st century skill

While the traditional stockbroker’s function is changing drastically with the use of complex algorithms to determine when to buy or sell shares, the typical profile of a trader, entrepreneur, plumber and racing mechanic is also changing to incorporate dynamic, skillful, forward-thinking, risk-taking, sensible yet bold young women.

Kyle Lauf is a life orientation and business studies teacher at Assumption Convent School in Malvern East, Germiston, Gauteng.
References:
1. See: https://teaching.uncc.edu/services-programs/teaching-guides/course- design/blooms-educational-objectives
2. From R1869 on 7 December 2016 to R3950 on 21 November 2017. See: https://www.moneyweb.co.za/tools-and-data/click-a- company/?shareCode=NPN
3. From R55 on 1 December 2017 to R4.60 on 22 December. See:
https://www.moneyweb.co.za/tools-and-data/click-a-
company/?shareCode=SNH
4. See Nicky Newton-King’s profile: https://www.jse.co.za/about/board-profiles 5. See: https://www.npr.org/sections/thetwo-way/2018/05/22/613353836/a-
woman-has-been-named-as-nyse-ceo-it-only-took-226-years

Category: Winter 2019

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