DRIP PORTFOLIO
A Foolish Investing Game

Jeff couldn't help himself. He wrote an entire column about an online game called A Wall Street Century. This free game educates, amuses, and enriches, so Jeff shares about it in case you'd be interested in playing. Just don't beat him.

Format for Printing

Format for printing

Request Reprints

Reuse/Reprint

By Jeff Fischer (TMF Jeff)
November 15, 2000

The stock market has been down a long time, the country needs to find leadership, peace talks are failing, and tension mounts in hot spots. It isn't 2000, though, it's 1937. And, I'm buying stocks at 1937 prices.

A few weeks ago, I began to play a game called A Wall Street Century offered for free by BUYandHOLD. I'm mentioning it today because I've found that it lives up to Foolish principles: it educates, amuses, and enriches.

How the game works
Every new day in real life represents a new year in the game. The game began last month by pretending that it was 1900, and it will end in January, 100 days later, pretending that the year is finally 1999. Today, for example, it is 1937. Tomorrow will be 1938. By Monday, it'll be 1942 -- deep in the darkness of World War II.

Every year, you're given a salary to invest, and every year, new companies go public, just as they did over the past century. The numbers are all historically correct. In 1919, you could have bought Coca-Cola (NYSE: KO) when it went public (if you could get shares before they ran out, that is, because everyone playing wanted them!). The stocks go through splits, they pay dividends that are tracked for you and are reinvested, and the stocks rise and fall just as they did over the past century -- year-by-year.

The goal is to grow your portfolio more than the other contestants by the end of 1999. There are also prizes for winning any of the five eras in the game, so you can join anytime. Part of the fun is buying General Electric (NYSE: GE) in 1933 at $11 per share knowing that it'll be a $500 billion giant in 1999. (Sounds easy, right? But, will you outsmart the other contestants overall?)

What the game teaches
A key part of the game that I'm enjoying is the education and the new perspective it gives. Every day, A Wall Street Century summarizes a past year in three short paragraphs. Here's a clip from the 1936 summary:

"Germany occupies the Rhineland. The Axis is born: Hitler and Mussolini pledge joint foreign policy; Germany and Japan unite against Communism. Civil war erupts in Spain. France devalues the franc, Italy the lira. Germany's airship Hindenburg debuts... The Robinson-Patman Act prohibits chain stores [from] selling at or below cost, and the Walsh-Healy Act requires government contractors to pay minimum wage for a 40-hour workweek. Bruno Hauptmann is executed for the Lindbergh kidnapping. Life Magazine and the Waring blender are new."
After you read the year's summary, you make your investment moves for that year. As you do, you can't help but wonder what it was like to live through these times. You think, "As a chain store, how did the recently public Walgreen's (NYSE: WAG) stock do in 1936? Did it get whacked?"

(Then I start thinking about my grandparents and my great aunt who invested through these times, as another European war quite clearly approached. How did they have the fortitude to hold stocks?)

Another thing that you're reminded of is that times don't really change. We might feel that we're living in exciting times today (hey, who is our new President!?), but reading each of the yearly summaries, one realizes that all years have exciting breakthrough innovations and small or large disasters. Going through the Great Depression years last week, one realizes how truly healthy the economy is today, whatever the Wise say -- and then you step up and buy GE and Coca-Cola at the very bottom in 1932 with a little, um, hindsight to help you.

The game shows you the power of dollar cost averaging over time, and of dividend reinvestment. But, it also conveys that we're not living in times that truly feel much different from the past. Uncertainty is the only sure thing ahead of us, and we're always on the cusp of a new world.

Watching value grow, year by year
In an accelerated but effective way, the game also teaches you the value of buying and holding great companies. Your portfolio might soar all through the 1920s, and then it might lose 50% in the early 1930s (and, I sold some stocks in 1929, I admit -- but I kept Coca-Cola and GE). However, by the very next year, your holdings often have recovered. This reminds you that stocks fluctuate that way in life, too. One year can make all the difference with an investment, and 10 years can be a lifetime of difference. The game reminds you: don't focus on just one day, or week, or month. Think in years.

Playing the game
If you like thinking about history and if you like the stock market and investing, this game should keep your interest and reward you. It only takes a few minutes every day to play (sometimes just seconds: read the yearly summary, buy more Coca-Cola), and you can skip days if you want. When you return, you have a few year's worth of salary to invest.

I only meant to write a few paragraphs about the game, but it has become a column. Oops. I wrote about A Wall Street Century of my own initiative because I enjoy it. You might enjoy it, it teaches great Dripping lessons, and it's free.

If you play, be sure to sign-up for the daily e-mail update that provides your portfolio's performance. Aside from the fun of seeing how your stocks did for the past year, the e-mail reminds you to visit the game each day, read what happened that year, and make your investments.

If anyone is playing this game already, let's post about it on the Drip companies board (feel free to post right now!), so we can compare performance so far -- and, um, maybe strategy.

Tomorrow, back to the high-growth study. Have fun... and Fool on!

Drip Portfolio


11/15/00 as of ~8:30:00 PM EST

Ticker Company Price
Change
Daily Price
% Change
Price
CPBCAMPBELL SOUP0.943.14%30.75
INTCINTEL CORP0.561.37%41.50
JNJJOHNSON & JOHNSON0.380.40%95.00
MELMELLON FINANCIAL CORP(1.31)(2.81%)45.44
PEPPEPSICO INC(1.25)(2.61%)46.56

  Day Week Month Year
To Date
Since
7/28/1997
Annualized
Drip(0.21%)2.26%(3.82%)9.82%31.46%8.63%
Comparable S&P 500n/an/an/an/a20.23%5.73%
S&P 5000.51%1.76%(2.75%)(5.39%)48.07%12.61%
S&P 500 (DA)0.50%1.73%(2.71%)(5.30%)50.69%13.21%
NASDAQ0.87%4.51%(6.06%)(22.21%)101.68%23.65%

Trade Date # Shares Ticker Cost/Share Price Total % Ret
9/8/9749.5166INTC24.2441.5071.49%
10/7/9837.3159MEL34.7745.4432.15%
11/14/9716.236JNJ80.1195.0019.82%
7/28/005PEP48.0046.56(2.99%)
4/13/988.403CPB53.9830.75(41.48%)

Trade Date # Shares Ticker Total Cost Current Value Total Gain
9/8/9749.5166INTC1,200.412,054.94858.12
10/7/9837.3159MEL1,297.431,695.54417.19
11/14/9716.236JNJ1,300.691,542.42257.79
7/28/005PEP240.00232.81(7.19)
4/13/988.403CPB453.61258.39(188.15)
 
Cash: 
Total: 
0.04
5,784.14
 


Key
• S&P 500 (DA) = dividend adjusted. Dividends have been added to the total return of the index.

Note
Drip Port launched with $500 on July 28, 1997, adds $100 to invest every month, and the goal is to own $150,000 in stock by August of the year 2017. Due to the slow nature of dollar-cost-averaging and our relatively significant starting costs, we do not expect to seriously challenge the S&P 500 for the first three to five years as we build an investment base. The long-term advantages of dollar-cost-averaging still overcome the short-term disadvantages, however. Final note: our investment in Campbell Soup is frozen due to fees instituted in its investment plan. Click here for a history of all Drip Port transactions.