Seventh Grade Takes Over Wall Street on Their Annual Trip to Wells Fargo!

Our seventh graders wrapped up their year with a cornerstone of our Middle School Financial Literacy curriculum: the annual trip to Wells Fargo! Greg Peterson, P'20, whose generosity along with that of his wife Mary Harada, began this program 12 years ago, and he has been instrumental in its development throughout that time. And lucky for us, we have all of the info about the trip from Greg, serving once again as our fabulous View roving reporter:

Our seventh graders trekked to Wall Street spending a day at Wells Fargo! This is the culmination of their investment management role as part of the Financial Literacy curriculum.

A centerpiece of the Seventh Grade curriculum is the students managing a real portfolio, which was a gift from a Speyer family. Each incoming grade has a gift of $20,000 and over their nine years at Speyer, this portion will grow with investment returns. At the time of Eighth Grade graduation, the original $20,000 rolls forward to the incoming Kindergarten class, and the increase in total value from inception is quantified. This value is then split into two: half is designated by the eighth graders as a graduation gift back to Speyer, and the other half is gifted pro rata to the students themselves to further their education.

We are now in the 12th year of the program and the portfolio is currently $350,000! At the beginning of the school year, the Seventh Grade takes responsibility (with Speyer parents Dr. Thor Johnson and Rui Dong’s input and advice from Wells Fargo Advisors) to review and rebalance the portfolio. This year, the student Portfolio Managers reviewed the Investment Policy Statement to ensure diversification and limit risk in the portfolio by creating concentration limits on individual and aggregate investment levels. The managers also sold several positions due to concerns about the company’s prospects as well as certain positions' poor performance versus mutual fund/index peers.

They did a lot of research to select new investments for the portfolio, and the additions to the portfolio reflected their consensus views of future growth and profitability. The managers noted they not only learned about the intricacies of the financial markets, the impact of the Federal Reserve, politics, and the global economy, but also the need for collaboration, supporting an investment decision, diversification, and taking a long view.

The portfolio managers also have oversight of the Sophie Krupp Memorial Chess Fund. For this fund, they tried to be as safe as possible, preserving principal while still making decent returns. The fund now holds individual stocks as well as ETFs and bonds, with the goal to build its size over time. The money in this fund will be used to support the Chess program at Speyer — in small amounts to start but growing over time.

Lauren Matles from Wells Fargo, Michael Katz from Truist, and Speyer alumni parent Yvonne Woo from Goldman Sachs hosted the on-site event. The group began the day with an overview of the role of an investment bank and the different functions performed in the world of finance and a tour of the trading floor.

It was then time for the individual investment contest results! Now in its ninth year, each student chooses three stocks to track with the ability to trade mid-year. Overall, class returns totaled 9.2% while the S&P 500 totaled 7.7% over the same period. The results were announced in Academy Award fashion — complete with gold statuettes! The following were the big winners:

AI AI Captain! – Goron Z. Gordon rode the AI and Tech wave in the second half of the contest to generate the best second half return (+55.1%) as well as the best overall return for the year (+34.6%). Grok says congratulations!
One-Hit Wonder Award – Ronak S. Ronak rode a +120.6% return in Nuraxis stock in the first period, which was the single best performing stock in any period and almost enough to secure the best overall return. Unfortunately, four stocks were negative for the year. The overall +32.7% return was good enough for second place!
Comeback Kid Award – Mijo C. After posting a loss of -28.1% in the first half, Mijo came storming back with the second-best return (+51.2%) in the second half with strong returns in all three stocks including a +111.8% return in AMD stock.
Look Out Bill Ackman Award – Jasper H. Notorious short seller Bill Ackman would be envious of Jasper’s ability to pick losing stocks. Two stocks went bankrupt and a third is on life support. Jasper’s overall portfolio was down -97.9%, which we have never seen before, nor will we ever see again! Jasper noted tanking was his strategy for an award and hedge fund opportunity.
It’s a Marathon, Not a Sprint Award – Lucas P. After posting the best return of the first half (+25.3), Lucas’ defensive stocks lagged (-16.0%) as the AI and Technology trade took off in the second half.
SWITCHEROO! Award – Gordon Z. Gordon had not one, but the two best stock switches in the contest, swapping Super Micro for Western Digital (+72.3%) and Nvidia for Micron Technology (+75.7%). These were the two best switches out of 32 made this year.
Switcherboo Award – Spencer C. Spencer’s switch from Apple to the Proshares Ultra Short QQQ may have seemed like a good idea at the time, but ended up being the worst performing switch, falling -39.3% in the second half as the AI and Tech trade reasserted itself.
Wait for It – Avin P. Despite a -23.4% loss in the first half, Avin made no switches. This patience was rewarded as IBIT (Bitcoin ETF), Alphabet, and CoreWeave paid off for a nice +27% return in the second half.
Five Out of Six Ain’t Bad Award – Sana K. While no student had all six stocks with a positive return, Sana had five positive stocks and was the only student to accomplish this. Nvidia stock in the first half (-12.5%) was the only blemish.

At lunch, the students held a panel discussion with Wells Fargo and Goldman Sachs analysts from Investment Management, Trading, and External Investing Groups, learning about their education, careers, and day-to-day responsibilities in their jobs (such as the time they came to the office, hours worked, time they went home, and classes taken in high school and college that set them up for these careers). The analysts were asked insightful questions by Speyer students including “What are the elements of culture among the people you work with that make this a career you want to stick with?”!

Next up, the group heard from the student Portfolio Managers for the year: Anya A., Leon E., Jessica H., Sana K., Clara L., Zachary L., Ziva M., Alice P., Avin P., Isaac S., Max S., and Gordon Z. They shared the turbulent marketplace they faced with tariffs and the Middle East war impacting most public companies and high interest rates, with roller coaster rises and falls in both the equity markets and their bond portfolio. They did not panic, which bode well, making changes to their holdings, and their investment deliberations throughout the year. In fact, tracking their sales, they avoided further losses in those investments after the sale dates.

The discussion included debate on optimum asset allocation, what changes to make in the portfolio, how to manage the summer investing period, and lessons learned to transfer to next year's rising Seventh Grade. Year-to-date, the overall portfolio returned a respectable 7.7% return against an S&P benchmark of = 8.3% and PIMCO Active Bond ETF = 0.0%!

Huge thanks to all of the professionals and parents from Goldman Sachs, PricewaterhouseCoopers, Wells Fargo, Truist, Dr. Thor Johnson, Rui Dong, Dorothy Meyer, Michele Glazer, James Cappabianca, the Harada/Peterson and Krupp Families — and everyone who supports this wonderful and unique element of our curriculum at Speyer!