Students Practice Strategy under Pressure in the Yale Stock Trading Game

April 3, 2024
Technion-Israel Institute of Technology Israel

Idan Gez, an MBA student at the Technion – Israel Institute of Technology and a partner in two startups: one in the financial field (Dow Jokes) and the other in the field of electric vehicles (CommuniCharge), recently participated in the 4th Annual Global Network Stock Trading Competition, which is an online version of the Stock Trading Game that was created by Yale School of Management Emeritus Professor of the Practice of Finance Roger Ibbotson in the 1970s. Since 2021, students from Global Network for Advanced Management (GNAM) schools have been invited each February to participate in the game and compete against their peers around the globe. In February 2024, more than 225 students from 12 GNAM schools participated. In this post Idan reflects on his experience of the game.

During the month of February, I participated in the Yale University Stock Trading Game. The purpose of the game is to illustrate how the capital market works. At Dow Jokes we analyze the impact of macroeconomic indicators on each other and study their effects on the microeconomy, so I was looking forward to playing. In the game, there are four companies (green, orange, red, and blue) that participants must try to estimate the value of and earn as much money as possible through buying and selling operations. In the first round, out of 30 participants, I finished in 5th place with a return of 16.1% on my investment.

As an admittedly competitive person, I was not satisfied with the results of the first round, especially with the significant gap between my performance and the first-place achiever who had a phenomenal return of 57.7%. Therefore, I decided to implement a more sophisticated strategy. 

 

Idan photo
Idan Gez on the Yale Campus during Global Network Week in March.

Over the next few days, I pondered how I could improve my results for the final round, and I developed a strategy for the final round. In the final round, out of 73 participants, I secured 3rd place with a return of 95.7% - a significant improvement!
As someone who invests in the capital market in real life, I strongly believe in diversifying investments to reduce risks and moderate portfolio volatility. However, in this game, diversifying effectively in 25 minutes is challenging, necessitating a certain degree of aggression to win. It's akin to informed gambling with a relatively high level of certainty, much like life and investments.

Overall, the experience was enlightening. The Yale Stock Trading Game offers participants a glimpse into the intricacies of the capital market, fostering a deeper understanding of market dynamics and investor behavior. The rapid decision-making required in the game sharpens one's ability to analyze information swiftly and make strategic moves under pressure. It's a simulation that mirrors the real-world challenges investors face, albeit in a condensed timeframe.

The game enhanced my comprehension of how the nuances of supply and demand dynamics enables more informed investment decisions, empowering investors to navigate market fluctuations with greater confidence.

The Yale Stock Trading Game is an amazing opportunity for individuals interested in learning about the capital market, and I highly recommend it. Technion's participation in the Global Network for Advanced Management amplifies its stature as a leading institution in the realm of business education and research. Engaging with peers and experts from diverse backgrounds fosters cross-cultural collaboration and exposes students to a broad spectrum of perspectives and practices. The network serves as a conduit for knowledge exchange, providing opportunities for students to broaden their horizons and cultivate global perspectives. Through initiatives like the Yale Stock Trading Game, Technion students can leverage the network's resources to enhance their learning experiences and cultivate relationships with esteemed scholars and industry leaders.

In March, for Global Network Week, I visited Yale University, where Professor Roger Ibbotson invited me to lunch to discuss the game and my strategy. The conversation was enlightening. Professor Ibbotson is a renowned figure in the world of economics and one of the smartest and kindest individuals I have ever met. It was a pleasure to meet him and spend time with him.  

Thank you very much for reading this post, and if you have any questions, please feel free to send me a message on LinkedIn at https://www.linkedin.com/in/idan-gez-830012156/.