Knight Capital

Knight Capital Provides Students with Real-Life Investment Strategies

Pace parent Michael Merlin (right) discusses economic downturn during the government shutdown with (L-R) seniors Joe Hirsch, Drew Schiffer, Billy Snyder, Clay Swiecichowski and parent Brad Ladden. Photo: Charlie Hirsch

While some students prefer using the extra 30-45 minutes to sleep in on school mornings, a small group of dedicated students arrive early to sharpen their investment strategy skills at Pace’s investment club, Knight Capital. Under the direction of math teacher and faculty adviser Keith Newman, members of Knight Capital meet every other Monday morning a little after 7 a.m. to learn about investment strategies and the stock market, including how to evaluate a company’s potential and assess its risks. 

Mr. Newman gives valuable guidance based upon his own business experience and views Knight Capital as an opportunity to “teach students to make smarter investments by researching and investing in good companies.” In addition, Knight Capital members are mentored by parents in the Pace community. 

Pace parents Brad Ladden and Michael Merlin volunteer their time to share real-life experiences, while giving their expert advice on the market, investment strategies and stock analysis. They also guide students on how to evaluate a company’s growth potential as well as present-day factors (like the tariffs imposed by the present government) that can affect the performance of a company’s stock.

All of this is put to good use as part of a virtual undertaking. Knight Capital students are each given $1 million (and the option to borrow an additional $1 million, if needed) to make investment decisions for a stock portfolio through an online platform called Market Watch. Through this process, students learn about how to evaluate short-term and long-term  investments as well as the rewards and pitfalls associated with investing in the markets with a million dollar online investment competition.

At the end of the school year, the team with the greatest virtual return on their initial investment is deemed the winner. Student club leader and senior Andrew Ladden explains that the virtual investment exercise is “not about winning or actual money, but rather about gaining experience and learning investment strategy skills.”

Junior Austin Kelly and his team learned this the hard way after a risky investment in Aurora Cannabis Inc., a Canadian-licensed marijuana production company, which became public on the New York Stock Exchange in October 2018. The company tanked within its first few days of going public and has yet to recover. “I learned that making risky investments has the potential for big rewards but potentially even bigger losses,” said Kelly. In these volatile times, low risk investments have been the most fruitful.

With big expectations but also the potential for great market swings (in both directions), Knight Capital members hope that their newly-acquired investment skills will pay off for them in the competition – as well as in real life one day.


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