Congratulations to Seunghee Cho, MBA 2022, on winning first place at Yale’s Stock Trading Game last week! The game is open to partner schools of the Global Network for Advanced Management and Seunghee competed against 306 candidates from 12 partner schools. We caught up with her to find out more about the game, what motivated her to take part, and what strategy she used to win.
Can you tell us about your background and why you are interested in finance?
I studied Business Administration at university for my bachelor’s degree and I was intrigued by the finance related classes. I wanted to continue developing my finance skills after graduation. Luckily, I got a job in the finance sector and built my career in managerial accounting in the manufacturing industry.
Also, it has been more than 10 years since I started investing in the stock market. In the beginning, I could not earn a lot of money due to my lack of experience, so I studied not only the basics of the stock market but also the trends and the global economic situation for a long time. It was not easy to get used to learning it, but once you are at an adequate level, you can accumulate your knowledge on your own.
I started the ESMT MBA program this year and was recently elected as the President of the Investment Club.
The Stock Trading Game is a tool used to introduce students to the concepts and mechanics of capital markets and stock trades. Tell us about your experience of the game.
Playing the game, I recognized that it has many concepts of the real stock trading market. You can start the game with 4 companies’ stocks, valued at $40 per stock, and get 5 stocks of each company, and $200 cash.
It is operated in 30 minutes and during that short time, you can trade your stocks, buy limited information with $1, or get some distorted information in the market for free. After finishing the game, the stock is to be liquidated as the real value of the stocks.
In the market, the stocks of each company have their own value, but they are traded as the market values at the moment in the short term. But as time goes by, the market values are closing to the real value of each company. During the 30 minutes restricted time, you need to trade your stocks and find the real value with limited information. You can even borrow a maximum of $200 of money from the bank. It is so similar to the real stock market.
What was your strategy for the game?
I focused on finding the real value of each stock. I bought information to find it and when the real value was getting clearer, I sold the lowest-priced stock in the market value first. On the way to finding the real value and selling the real stocks, the time flew by and I could not afford to buy the most valuable stock at a good or reasonable price.
I changed my strategy on the game from buying the most valuable stocks, to focus on buying the stock which had the biggest gap between the real value and market value. At the end of the game, the real value is revealed, and it will be changed and calculated as the real value. I even borrowed the money to buy as much as I could to win.
In the end, the strategy worked. I borrowed a lot of money, but the net value was enough to beat the others. I knew it was risky, but I decided to take one of the riskiest ways to win the game, but it was worth it and worked out well.