A recent issue of the Wall Street Journal describes how the Chicago financier, Colonel Henry Crown, in the late 1960’s gave money to about 25 schools so that students could try their luck at investing in stocks. The article reports that students of economics seem to do just about the same as the average investor—no better, no worse.

For several years, Mines seniors in metallurgical engineering have been doing the same thing, but not having the benefit of a gift from Colonel Crown, they have used "hypothetical money."

Several local rules govern the Mines investments" only purchase of stock in metal companies is permitted; copper, silver, platinum, and silver coins can be bought and sold short on the commodities markets; and options can be bought or sold on the C.B.O.E.

The make-believe commodity trading encourages the students to watch daily metal prices, and a number of students subscribe to the Wall Street Journal to keep up with the latest developments. Computer programs make it possible to insert daily prices and to get a print-out of each student’s standing in each of the three investment areas.

Metal companies have been happy to supply annual reports for each of the students, and brokerage houses supply various kinds of helpful literature. Outside speakers are invited occasionally to give the class expert advice. During the fall semester, Mr. Scott Steinhauer, general manager of a prominent brokerage office in Denver, told students what they would have to do to make real investments and pointed out both the possible gains and the pitfalls.

Marvin Gantz, class of 1940 and Medalist in 1971, who is now executive vice president of ALCOA, had taken an interest in this program. He volunteered to explain the most recent ALCOA annual report, as well as the situation facing all aluminum producers. His talk was a high point of the course and attracted listeners from other departments.

Dealing in hypothetical money does not have quite the excitement of actual gain or loss. As an incentive, a prize of a five-pound box of chocolates was offered for the most successful student speculator. On the final day of reckoning, the winning student failed to attend, so his classmates devoured the prize, leaving only one sad smashed chocolate as his reward.

From the Mines Magazine
February 1976