Stock Simulation Reflection Paper

1540 Words7 Pages
Daniel Cedeno
Stock Simulation Reflection Paper Like many investors in the 1920s, during my stock simulation I was a newcomer who experienced first-hand how a stock market can ramp up into a boom, then collapse into a bust. My initial approach in the simulation was to spread out my investments so I can limit the consequences of bust. When I realized what stocks were working for other class mates, I joined in the speculation of the “crowd” and rode the wave hoping for success. Although I did read up on the fundamentals of the stock market and the dividends played by companies, my success was predicated on the information that the companies were willing to give at the time. In time, it became apparent that direct correspondence to long-term productivity of a company became less of a factor then the classes’ effect on buying and selling stocks. The simulation would also show how in economics the process of boom and bust is a phenomenon where sustained increase in numerous economic indicators is followed by a sharp decline.
Throughout, the simulation I took an approach where I would spread out my funds throughout different stocks to limit a potential bust. In year 1 of the stock market game I decided to invest heavily in U.S. Steal, Union Pacific, and Coca Cola. In U.S. steal I saw the potential of an expanding railroad system allowing for favorable developments for steal companies. Furthermore, the direction of house building upwards could lead to a considerable expansion
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