How a high school teacher and his students cracked the code of Wall Street.
By Mary Achor
Board of Directors
Canyonville Christian Academy
When I was a youngster, my father used to say that the only true wealth is land, cattle, and a pond full of catfish. Today, even that may not be true—if your land holds a big mortgage. Or, if you don’t happen to be one who eagerly anticipates a succulent fish fry, even if it is free.
In 2008, the United States economy came crashing down.
Economic woes, downturns and crashes are not a new thing. Sooner or later, another one comes along. I can remember my Dad grumbling about Lyndon Johnson’s Great Society. “How are we going to pay for this—especially when the economy goes down?” Young, naive idealist that I was, I assured him that America was great enough never to suffer another recession. “Oh, yes it will,” he said, and went out to feed the cows.
One doesn’t need to be a farmer-philosopher to know about recessions. All you need do is read the history books. Every ten or twenty years another economic crisis comes along. Sometimes, it hasn’t even taken ten years. Economists say that recession cycles are just a normal part of living with the ups and downs of supply and demand. And yet, we are always astounded when one comes along.
The “old-timers” still talk about 1929 and The Great Depression, which stretched out for ten agonizing years: breadlines, people living out of their rattling Model-T Fords, and brokers ostensibly jumping out of windows. It lives on razor-sharp in memory because of the graphic photographic images of the time, those evocative black-and-white shots of hungry, weathered, worn and beaten faces. We almost forget the three recessions that happened after the Korean War and before oil got to be the bone of contention.
Then, in 2007, a massive number of ill-advised housing loans to people who really couldn’t afford them led to a collapse of the housing market and, like a string of dominoes, businesses and widespread housing foreclosures. 2008 saw plummeting stock prices, as more and more abuses by C.E.O.’s and company officials were exposed.
Early in 2009, there was no end in sight. Daily economic reports dished out new disaster. U.S. families had lost over $11 trillion in 2008. Eight thousand banks registered a 149% increase in bad loans for the year. Businesses were boarding up, home mortgages were defaulting at an ever increasing rate, with families out on the street, some American auto companies were facing bankruptcy and closure, and the government was valiantly (or foolishly, depending on whom one talked to) attempting to stimulate the economy.
And my attention, along with everyone else’s, was fearfully focused, worrying about which country might go bankrupt first—and how that would affect my own looming ruin. It’s like that song they used to sing on the old television show, “Hee Haw.” Gloom, despair and agony on me…
I don’t understand the stock market. And I wouldn’t have enough money to seriously invest in it, if I did. But, like most of us, I do have an IRA. But I routinely threw away the unintelligible prospectuses from my financial advisor, and merely glanced at the dollars and percentages in his reports. I had no clue what any of it meant–except when it lost money. I completely relied upon my advisor, running my future by default.
Here is one thing I have learned: Even if I never choose to invest in future stock markets, it is essential that I be pro-active in my own financial well-being. I need to understand how the stock market works, so I can make logical, wise choices for myself and my family. I hope that is something you have recognized, as well.
No matter the financial collapse—and they will continue to come along—we should be asking ourselves, “What have I learned from this? And where do I go from here? How do I protect myself in the future?
And, mostly importantly, what do I teach my children so they can keep their own pension plans solvent? What can I teach my children so they can prosper?”
And here is where Canyonville Christian Academy comes in.
Educator Roger Shaffer, CCA’s key to training our young people how to prosper:
I met Roger Shaffer at Canyonville Christian Academy, located in Canyonville, a tiny town just off I-5 in southwestern Oregon. The Academy is a small boarding high school that is making a name for itself as an international prep academy. Roger has devoted his entire life to the Academy, founded in 1924 by his grandfather, A.M. Shaffer. After graduating from the Academy himself, he went away to college at University of Oregon in Eugene, studying finance—with an emphasis on the stock market—and followed up with post-graduate studies at Portland State University.
Roger Shaffer returned to the Academy to teach personal finance, government and economics. But this modern-day Renaissance man, consumed by his considerable passions and abilities, branched out to teach his students in ways and subjects he once never considered.
One of those passions is track and long distance running. Every day, both in high school attending the Academy and later at the University of Oregon—that mecca of track and field—Roger ran. After college, when he joined the Army and was sent to duty in Korea, Roger ran. He became a familiar figure on the roads even during the bitterest of Korean winters. One day, a jeep pulled up beside him. Its driver, oddly enough, was an old classmate from Oregon. “I knew it had to be Roger,” he grinned. “Only Roger would be running in that weather.”
When he returned to the States and the Academy, Roger brought home this passion for running to his students. During his athletic tenure, Roger coached thirty-seven championship teams in track and cross-country, and trained forty-nine individual state champions—all in this one small Academy in southwest Oregon. In 1998, in recognition of his excellence, Roger was named Oregon Coach of the Year. Small and wiry, as befits a long-distance runner, Roger logged 35,000 miles and a 2:58 personal best marathon before leg problems brought his running career to a halt.
The Fascinating Stock Market Game: Training for Prosperity
For Roger’s business students, there is the Stock Market Game.
In the game, sponsored by Portland State University and the Oregon Council on Economic Education, students are given a mock $100,000 and ten weeks to make as much money on the stock market as possible. Because of the short time frame, long-term investments are out, as is diversification—both wise stock market strategies for our IRA’s and 401(k)s, and for any serious investor.
Roger’s students have been participating in the Games since 1996. Out of 18 games, his students have won first place 17 times, although, as he tells it with a grin, one year they crashed and came in third. In the 2008 Fall Game, while the real stock market was crashing, out of 375 entries six of Roger’s students again took the top six honors.
In the spring of 2009, Canyonville students received their first invitation to participate in the national stock market game, “The Capitol Hill Challenge.” Entry in this game is by invitation only, so the size of the national field was limited to 719 total entries. It took place at a point in time when the stock market, scarily volatile, couldn’t decide if it wanted to rebound or not.
The ten week game was nip and tuck through the first eight weeks, with Canyonville at the top or in second. At the end, the Christian Academy of Louisville blew the game wide open with a series of trades that a professional stockbroker from Citi Smith Barney called the most incredible series of trades over a short time frame that he had ever seen in 25 years of following the stock market.
However, Canyonville students took second, third, fifth and eighth places. Not one other school had more than one entry in the top ten. Even the number one school had no other entries in the top 600! Never one to take second place lying down, Roger and his students were already honing their claws for the next game.
As we approach the mik-point of the current Oregon high school stock market competition, CCA”s Micah Jocoy has shot to a commanding lead.
His portfolio is up more than 46% in just four weeks, a period in which the major stock indices have been in decline.
Students from CCA’s economics course currently hold nine of the top ten positions in the Oregon rankings. Nearly 400 entrants are taking part in this spring’s investing competition.