Handout 2.19: Paper Ledger

Name: ______________________ Period: ______ Investor number: ______ Start date: __________

This is your ledger for the Gilded Age Market. It is the whole game. The teacher is the market. Every round, the year and the prices go on the board. You write them in the price table. You work out what you hold. You hear the news. Then you trade on paper. Your ledger is your proof. The Investor Report is written from it, and the leaderboard is built from it, by investor number, never by name.

The prices on the board are simplified and rounded so the arithmetic works. The direction of every move is what really happened.

The rules.

• You start in 1870 (Round 0) with $1,000 cash and no shares.
• Whole shares only. Cash may never go below zero.
• A buy: cash goes down by shares times price. Shares go up.
• A sell: cash goes up by shares times price. Shares go down. You cannot sell shares you do not hold.
• The bank: you may move cash into or out of BANK during any round. At the start of Rounds 1 to 8 the bank pays 3 percent of whatever is in it, rounded to the nearest dollar. It never falls. It does not pay at the closing bell.
• Every trade, and every move into or out of the bank, goes in the trade log, in order, the moment you make it.
• Every round, fill that round's holdings table: shares times price for each company, plus cash, plus bank, minus any margin loan, equals your total.
• The margin line opens in Round 6 only. The broker lends you up to the cash you hold, at Round 6 prices. In Round 7 the broker wants it back in cash. If you do not have the cash, you sell shares at Round 7 prices until you do. If your shares are not enough, the loan takes everything and your total is $0.
• Your trading partner initials one line of every holdings table.
• * *

Page 1. Section A: the price table (fill in one column per round, from the board)

Write "not yet" where a company is not on the board. BANK is not a share price; it pays 3 percent of the balance at the start of Rounds 1 to 8.

Section B: the trade log

One line per trade or bank move, in order. A bank move is written with BANK as the company and "in" or "out" in the buy or sell column. Ask for a second log sheet if you fill this one.

Page 2. Section C: what I hold, round by round

Fill one table per round after the prices go up and again after you trade (cross out and rewrite; the trade log has the order). Value = shares x price. Total = all values + cash + bank, minus the margin loan if there is one. Bank interest is paid before you fill the table, from Round 1 on.

Round 0, 1870 (the market opens)

Partner initials: ______

Round 1, 1873 (the Panic of 1873)

Gain or loss since 1870 (total minus 1,000): ______ Partner initials: ______

Round 2, 1882 (the oil trust; ELEC joins)

Gain or loss since 1870: ______ Partner initials: ______

Round 3, 1893 (the Panic of 1893)

Gain or loss since 1870: ______ Partner initials: ______

Round 4, 1901 (US Steel; STEEL joins)

Gain or loss since 1870: ______ Partner initials: ______

Page 3. Section C, continued

Round 5, 1911 (the breakup of Standard Oil; AUTO and RADIO join)

Gain or loss since 1870: ______ Partner initials: ______

Round 6, 1928 (the boom; the margin line opens)

Gain or loss since 1870: ______ Partner initials: ______ Teacher initials on the margin loan: ______

Round 7, October 1929 (the crash; margin loans are called)

Gain or loss since 1870: ______ Partner initials: ______

Round 8, 1932 (the bottom; the market freezes after this round)

Gain or loss since 1870: ______ Partner initials: ______

Closing bell, 1936 (no trades; no interest)

Partner initials: ______ Teacher initials: ______

Page 4. Section D: the margin line (Round 6 and Round 7 only)

Round 6, 1928. Cash I held before borrowing: $______ The broker lends up to that amount.

I borrowed: $______ (write it on the Round 6 margin loan line and in the trade log as "BANK / broker loan in")

What I bought with it: ______ shares of ______ at $______ = $______

Round 7, October 1929. The margin call. The broker wants $______ back in cash, now.

Cash I have: $______ Cash I pay: $______ Still owed: $______

Shares I sell to pay the rest, at Round 7 prices (also in the trade log):

Loan after the call: $0 / wiped out (the loan took everything; my Round 7 total is $0). Circle one. Teacher initials: ______

Worked example. Investor 14 has $200 cash in Round 6. She borrows $200, the most allowed, and buys 4 RADIO at 100 for $400. In Round 7, RADIO is 30, so her 4 shares are worth $120. The broker wants $200. She has no cash, so she sells the 4 RADIO for $120 and still owes $80. She sells 2 OIL at 50 for $100, pays the $80, and keeps $20 cash. Her margin line goes to $0.

Section E: my closing numbers (fill at the closing bell, Lesson 2.19 Day 1)

My starting total, 1870: $1,000

My closing total, 1936: $__________

Closing minus starting: __________ (write a minus sign if it is a loss)

Divided by starting: __________ divided by 1,000 = __________

Times 100: my percent return is __________ percent (circle: gain / loss)

My highest total in any round was $__________ in Round ______ (year ______). My lowest was $__________ in Round ______ (year ______).

Page 5. Section F: Round 2, the replay (Lessons 2.20 to 2.22)

Fresh $1,000. Same rules. You know what is coming. The margin line is open in Block 1 on the Round 6 rule, and the broker calls the loan in Block 2.

Round 2 price table (from the board)

Round 2 trade log

Round 2 holdings

My Round 2 closing total: $__________ Percent return: (__________ minus 1,000) divided by 1,000, times 100 = ______ percent

Knowing the crash was coming, did I borrow in 1925? yes / no. Did I buy at the bottom in 1932? yes / no. One sentence on why: ______________________________________________________________________

The teacher key for this handout is behind the teacher sign in. Teacher key