The first plan for Sycamore High School's L337 team was simple: randomly select companies to buy in the Stock Market Game and hope to win.

Sycamore High stock traders Jon Mudronja (left) and Ryan Price helped lead the team into sixth place. (Michael E. Keating photo) | ZOOM |

        Uh, it didn't work. At the end of the fourth week in the 10-week market simulation, the group of five seniors had gone from their starting $100,000 to just $87,446. The loss of more than $12,500 placed them behind 350 other Greater Cincinnati high school teams, out of the almost 380 playing.

        “We were playing real close to the bottom for a while,” team member Ryan Price said.

        So L337 switched to Plan B — a little more research and diligence — and leap-frogged into sixth place. Just like that, the boys ended last week with $115,109, a 15.1 percent gain from when the game started Feb. 25 and a 31.6 percent gain from their bottom in late March.

TEAM L337

School: Sycamore High School     Teacher: Tim Wolfe     Members: Jon Mudronja, Ryan Price, Jeff Postow, Paul Magarill and Brad Haugen.     Portfolio: $115,109.47     Eight-week return: 15.1 percent.     Holdings: RailAmerica, Compaq, United Online (sold), ACLN Ltd. (shorted)     Quote: “If we were going to make a lot of money, it wasn't going to be in Fortune 500 companies,” Jon said. “It would be in unknown companies making massive movements at one time.”

        The biggest strategy switch brought their biggest gain: reversing their position on ACLN Ltd., a Cyprus-based firm that transported used cars from Europe to Africa. Losing money on the 2,000 shares bought at above $9, L337 decided to dump them and sell the stock short — betting that the price would keep falling.

        Short-selling occurs when a trader borrows stock from a broker, then sells it. The trader then buys it back to return to the broker. If the stock price falls between the sale and the repurchase, the trader makes a profit.

        L337 shorted ACLN at $8.89 a share. The following week — under accounting questions and criminal charges levied against the company's president — U.S. authorities suspended trading in the stock.

        “It's pretty shady,” Jon Mudronja said. “We like the shady companies.”

        When the stock started trading again two weeks later, it moved from the New York Stock Exchange to the over-the-counter market. L337 paid only $1.83 a share to cover the sale — profiting more than $14,000.

        Team member Jeff Postow is optimistic about moving up in the rankings — but his teammates just want to beat their classmates.

        “Staying the top school team is our goal right now,” Ryan said.
       

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