Lesson 2.15, two days. Day 1: slides 1 to 9. Day 2: slides 10 to 18. Every dispatch line is from page 3 of Handout 02.14 - The Gilded Age Market Kit.md; the hype headlines on slides 10, 11 and 12 are mine, written for the game.
Do now (Day 1)
- The Round 2 dispatch, 1882, shown in full.
- Read it again. Write: what happened, and which companies care.
Teacher notes
4 minutes. Cold call three for the companies: OIL, ELEC, RAIL. Then point at the price table.
Why did those prices move?
- RAIL: 50, 30, 45. OIL: 10, 12, 30.
- Nobody in this room made those numbers.
- A great many people heard news like this and decided the same thing at the same time.
- Today: read the news the way they did, and know when the news is lying.
Teacher notes
Image: a crowd of men in hats around a newspaper stand, 1880s, one pointing at the front page.
Supply and demand in one picture
- A company has a set number of shares.
- Lots of buyers, few sellers: the price goes up.
- Lots of sellers, few buyers: the price goes down.
- That is the whole rule.
Teacher notes
Image: a seesaw. Left side labeled BUYERS with many figures, right side SELLERS with two; the price arrow tilts up.
Copy the two lines onto the journal's My notes page.
Four kinds of news you have already heard
- A bank fails and the borrowing stops: RAIL fell from 50 to 30 in 1873.
- People still need light: OIL and GAS rose a little in the same panic.
- One company controls almost all of a thing: OIL rose from 12 to 30 in 1882.
- A new invention arrives: ELEC joined the board at 25 in 1882.
- The bank ignores the news.
Teacher notes
Image: four small drawings: a closed bank door, a lit kerosene lamp, an oil barrel with a crown on it, a light bulb.
The three tests for a headline
- Who says it? A named company, a court, Congress, a dated report passes. "Everyone" or "insiders" or nobody fails.
- Is there a number? A date, a percent, a count, an amount passes. No number fails.
- Does it tell you to hurry? No rush words passes. "Now," "last chance," "before it is too late" fails.
- Two or three passes: probably a fact. Zero or one: hype.
Teacher notes
Image: three icons in a row: a mouth, a number sign, a running figure with a red X.
Copy the tests. Tomorrow we use them. Today we only learn them.
Part A: match the news to the price
- Eight pieces of the dispatches from 1873 and 1882. Eight price moves from the board, shuffled.
- Match each card to the move it caused.
- Write the sentence: "___ happened, so more people wanted to buy / sell ___, so the price went up / down."
- Pairs. 8 minutes.
Teacher notes
Circulate with the clipboard: six of eight matched, direction named. Debrief Jay Cooke and RAIL, then the two cards about light.
Round 3. The year is 1893.
- Before the prices go up: one prediction on Entry 3. Which company on my ledger is most at risk if there is another panic, and why? Use the card.
- Then: add the bank's 3 percent, fill the column, work out your total. Then the dispatch.
- Question from the dispatch: a friend who put every dollar into railroads, and a friend who split it four ways. Which one is still standing?
Teacher notes
Image: a locked bank door with a crowd outside it, 1893.
10 minutes. Prices: RAIL 25, OIL 28, GAS 24, ELEC 10. Read the Round 3 dispatch after the totals are done. Four minutes of trading.
Entry 3
- What I did. Why (name the dispatch). What happened.
- Plus: the prediction I made today and whether it came true.
- My total at the bell, in dollars.
Teacher notes
6 minutes.
Closure (Day 1)
- Two investors read the prediction line.
- Exit card: one company from today's dispatch, the price move it caused, and whether you predicted it.
- Tomorrow: how to tell when the news is lying.
Teacher notes
4 minutes.
Do now (Day 2)
- Headline A: "In February 1893 the Philadelphia and Reading Railroad, one of the biggest, goes bankrupt."
- Headline B: "RAILROADS ARE FINISHED. Everyone is selling. Get out NOW before you lose it all."
- Which one would you trust with your money? One reason.
Teacher notes
4 minutes. Headline A is the first line of the Round 3 dispatch. Headline B is mine.
Score the do now
- Headline A: a named railroad, a date, no hurry. Three. Fact.
- Headline B: nobody, no number, "NOW." Zero. Hype.
- A headline that tells you to hurry was written by someone who wants your money to move today.
Teacher notes
Say the last line slowly. It is the real-life rule.
One from the present
- A post online: "This stock is going to the moon. Everyone is buying. Do not miss it."
- Who says it? Is there a number? Does it tell you to hurry?
- Same test. Same answer. 1893 or today.
Teacher notes
Image: a drawn phone screen with a rocket post and no name on the account.
No real company names. Students will supply their own; do not confirm any.
Part B: fact or hype sort
- Six headlines from 1893. Three are pieces of the real dispatches. Three are made up to sound urgent.
- Score each on the three tests. Label fact or hype.
- For each fact: what would a careful investor do? Buy, sell, hold, or wait for more.
- Pairs. 9 minutes.
Debrief: headline 3
- "General Electric, formed only last year when Edison's company merged with a rival, watches its stock fall to a fraction of its price."
- Fact. Bad news. And a careful investor might hold, or even buy a little.
- Why? The stock fell. The dispatch does not say the company closed.
Teacher notes
Image: an early light bulb, lit, on a dark background.
Round 4, 1901. The first billion dollar company.
- Add the bank's 3 percent first. Fill the column: RAIL 60, OIL 40, GAS 30, ELEC 40, and a new line, STEEL 40.
- Work out your total. Then the dispatch.
- One investor runs the three tests on the dispatch's first sentence out loud.
- Question from the dispatch: US Steel is brand new and enormous. Is new and enormous the same as safe?
Teacher notes
Image: a steel mill at night with sparks, 1901.
10 minutes. Read the Round 4 dispatch after the totals are done. Four minutes of trading.
Entry 4
- What I did. Why. What happened.
- Plus: one headline I ignored today and which test it failed.
- My total at the bell, in dollars.
Teacher notes
6 minutes.
The rule you keep
- Prices first. Then the story. Then the decision.
- Two of three tests failed: it is hype. Do nothing.
- Nobody has to trade. Holding is a decision.
Teacher notes
Image: a ledger page, a folded newspaper, and a pencil.
Closure (Day 2)
- 3-2-1: 3 tests for hype, 2 headlines you labeled today, 1 rule you will use with real news.
- Three investors read the "1."
- Tomorrow: eggs and baskets.
Teacher notes
4 minutes. Fewer than three tests named is "needs more."