HONR 348M

Most citizens never learn how stock markets operate and the techniques for successful investing. Through readings, extensive class discussion, oral presentations and a simulated stock trading competition, the proposed course will introduce students to investing, with special emphasis on the field of technical analysis. The technical approach to the markets focuses largely on the analysis of price and volume patterns as indicators of future stock trends. Students will learn how to research companies using internet sources and to use a technical analysis program.

During several weeks of orientation about such topics as the vocabulary of investing, and trading tactics, the class will read and discuss the seminal writings of successful traders, including Jesse Livermore, Nicolas Darvas, William O’Neil and Peter Lynch. Each student will read close to 1000 pages during the first 5 weeks of class to prepare for the trading competition. The class will be run primarily as a learning laboratory and each student is expected to research stocks, and to bring their ideas and questions to the classroom. Expert traders will be invited to present their experiences to the class. Alternative approaches to technical analysis, including value investing and the random walk hypothesis will also be discussed in relation to the technical approach. Methods for using internet financial sites to research companies will be reviewed and demonstrated. Each student will make one oral presentation to the class on companies they have researched and analyzed. Each student will also participate in a ten-week stock market trading simulation in which s/he designs a trading strategy, selects stocks, and invests a mythical $100,000.

At the end of the course, each student will submit a final report of at least 10 pages plus an extensive appendix documenting their transactions. The report will contain an analysis of each trade in the context of the class readings and research, and will specify how and why the student will revise his/her trading strategy. The three students whose portfolio increases the most during the simulation will be awarded a certificate and a prize.

No prior experience with investing or business is required. However, it is essential that the student have a passion for learning about trading, as demonstrated by enthusiastic class participation and completion of all assignments. Willingness to read about 1,000 pages of required reading during the first five weeks is essential.

Assignments include:

• Weekly quizzes on terms, lectures and readings

• Oral presentations on research and analyses of companies

• Participation in class discussions

• Final report of analysis of trades, and preparation of a revised trading strategy