Stock Market Project

Sanjay Sreekumar
Bryan Yan
Sahil Bansal
Abhinav Shah
Esan Hassanzadeh
Strawberry Shortcakes
In this project we participated in the MSJ Stock Market Si!lation" a
ten week activity where y tea identi#ied" researched" and bo!$ht%sold
stocks on a virt!al stock arket& At the sae tie we each identi#ied one
stock to #ollow speci#ically in order to learn ore abo!t how it's ovin$
alon$ in the arket& By the end o# this project we learned abo!t how the
stock arket #!nction and abo!t the basic principles o# s!pply and deand&
(o !nderstand the p!rpose o# the stock arket in a arket econoy it's iportant
to know the de#inition o# the )stock arket)& In a stock arket" shares o# p!blically
traded copanies are #reely traded either in e*chan$es or +(, arkets& Shares allow
copanies to $row their capital while $ivin$ a section o# ownership in their copany to
the $eneral p!blic& Stock owners can participate in a copany's s!ccess%#ail!re and
allows individ!als to either loose or $ain oney in the arket& Both sides bene#it beca!se
there is a $reater potential #or a growth o# wealth& +verall the stock arket allows #or a
$reater #low o# oney between b!sinesses and cons!ers" which is critical to helpin$
keep and $row a arket econoy&
(he initial price o# a stock is deterined by Initial P!blic +##erin$ -IP+. where a
#inancial entity -!s!ally an investent bank. looks at copany's c!rrent and #!t!re
earnin$s -called potential. to deterine a set price that the p!blic can b!y shares& +nce
stocks are released" price is deterined by the #ree arket and by the principles o# s!pply
and deand& Stock prices $o !p when investors want to b!y ore and have con#idence in
the copany's earnin$ potential and the reverse is tr!e when stock prices $o down& /ews
s!ch as earnin$ reports and political events play a bi$ role in #l!ct!ations in stock prices&
(he priary way the stock arket a##ects the econoy is that it creates ore
available capital& A arket econoy is dependent on cons!ers to #!nction and by
creatin$ a constant cash #low" cons!ers are allowed to ake p!rchases&
0e choose stocks that represented a variety o# ind!stries incl!din$ resta!rant"
retail" a!tootive" cheical" and technolo$y& 0e attepted to red!ce potential losses by
bein$ as diversi#ied as possible& I# we were to do this a$ain" we wo!ld probably #oc!s on
j!st one or two ind!stries and )specialize) in the" -basically know as !ch as possible
how their arkets #l!ct!ate." beca!se o!r diversity ended !p h!rtin$ !s in the lo$ r!n&
-0e didn't know when the ri$ht tie was to b!y%sell&. I think we wo!ld chan$e ost o#
the stocks we selected beca!se we ade the istake o# choosin$ any based on )#ace
val!e) -s!ch as (esla which is a copany any people are e*cited abo!t." rather than
lookin$ at established copanies& +!r investents in the technolo$y sector were very
sart -s!ch as 1Mware. so those stocks we wo!ld keep&
2raphs
Dow Jones Index
16000
16100
16200
16300
16400
16500
16600
0 2 4 6 8 10 12
Weeks
D
o
w

V
a
l
u
e

(he 3ow Jones Inde* is a price wei$hted avera$e o# 45 lar$e and si$ni#icant
copanies traded on the /YSE and /asda6& Beca!se the 3ow !ses a lar$e pool o#
copanies it tends to a very $ood indicator o# the overall health o# the arket -ie& when
any stocks are $oin$ !p in price the 3ow is also $oin$ !p.& 7or (esla it wasn't a very
$ood indicator beca!se when the 3ow was $enerally risin$" (esla contin!ed pl!etin$&
M!ch o# this was d!e to #actors o!tside the $eneral arket that crashed (esla's stock
price& In week #o!r tho!$h when the 3ow crashed" (esla also dipped&