East Brunswick 4th Grader Wins Prestigious Honor

While mastering the stock market is a skill that can elude even the savviest of traders, one East Brunswick kid recently proved he's well ahead of his time. 

Abdur Mohammed, a fourth grader at Memorial Elementary School, recently won  first place for New Jersey and sixth place nationally in the SIFMA Foundation’s InvestWrite essay competition with McGraw Hill Financial. The competition challenges kids in grades 4-12 to "analyze an investment scenario and recommend portfolio allocations targeting short- and long-term financial goals."

About 600,000 students compete in The Stock Market Game program nationwide each year, according to Sifma. Abdur’s essay, called "Agreed and disagreed stocks while playing the SMG," asked Abdur to ponder buying or selling a stock that his team disagreed on the most, and then to write about how that could've effected their portfolio if they did the opposite of what they had agreed upon, according to Sifma.

After buying Franklin Electric Corporation, the team learned of a stock split that drove them to purchase additional shares.

“I learned how to diversify, maintain a good portfolio, how to research a stock, how to work in a team, and many other skills," Abdur told Sifma. "The SMG has made me develop an interest in becoming an investor in the future.” 

As a first place winner, Abdur was invited to speak on his experience at the Sifma Foundation's Tribute dinner and at it’s annual meeting last month in New York City. Abdur spoke to a large crowd of financial industry experts, along with other key speakers at the event, including former President Bill Clinton and Floride Gov. Jeb Bush among others.

Text of Abdur Mohammed’s Winning Essay (Courtesy of Sifma Foundation):

I heard a lot about NASDAQ, NYSE, and DOW Jones but never really understood what they really were. I was excited and enthusiastic when I found out that we would play the Stock Market Game (SMG). 

We researched many stocks with the help of Value Line and Google Finance. Value Line gave us information on historical results, which is helpful for research, while Google Finance gave us updated results so we knew what was happening. Some stocks were very valuable while some were a disaster. Before buying we thought of several strategies. We decided that when a stock rises or drops 5% we will sell it. With this strategy we intended to make short term profit. Also, we looked at companies that would give us good dividends. Dividends are money paid quarterly by a company to shareholders out of the company’s profit. A dividend is kind of like free money. A stock that pays good dividends means money to our portfolio. Most of the stocks we bought pay dividends. 

Our most disagreed upon stock was Microsoft Corporation (NASDAQ:MSFT). Since 2009 its sales were up 26%, its profit was up 59%, its price was down 2%, and finally its earnings per share were up 67%. We disagreed because its price was down 2%, and it had tough competitors like Google and Apple. But on the other hand it still had pretty good results. We fought back and forth on it and it finally ended up as a maybe. If we had bought that stock, we would have taken a loss. 

Our most agreed upon stock was 3M Co (NYSE:MMM). We looked carefully at the company and saw that it was a good long term stock which could also produce profit in short term. It was most agreed on because since 2009 its sales were up 28%, its profit was up 39%, its price was up 13 %, and their earnings per share were up 40%. Also, it was meeting predictions and its products were in high demand. In approximately one week the company rose $5. This company was a very good buy for us. 

While picking stocks we had many difficulties. Some stocks were good in profit, but bad in sales. Some were good in earnings per share, but bad in price. Some stocks weren’t in demand and some rose for only a day. We looked for stocks that were not blue chip because we needed to make money in ten weeks. Some stocks would take months to make a good profit. We searched for stocks that were good in mostly all categories. Some good stocks were 3M, Franklin Electric, Home Depot, and many others. We made sure that we diversified our portfolio so we could make as much money as possible. By diversifying, we would still make some money if one industry didn’t do well. We invested in clothing, manufacturing, and many different kinds of industries. 

There was one stock that really surprised us. It was the company Franklin Electric Corporation. (NASDAQ:FELE). We bought one hundred shares in the beginning. We had no idea that a stock split would take place. The stock was doing pretty well. Since 2009, its sales were up 46%, its profit was up 219%, earnings per share were up 216% and its price was up 83%. But then we found out that it was having a stock split and paying a dividend so we bought two hundred more shares. We waited until March 19th, for our shares to double. Then on March 31st we would get the dividend. As Warren Buffett said, “Past predicts the future” and Franklin Electric’s past dividend said that this year’s dividend would be big. By then we would have double the shares. So we would receive dividends on all 600 shares we own. This is really exciting! 

As a beginner the SMG gave me a good experience and knowledge of stock investing. I learned how to diversify, maintain a good portfolio, research a stock, work on a team, and many other skills. SMG has made me develop an interest in becoming an investor in the future.