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Stock Market Game Week in Review

The Stock Market Game is a curriculum-based teaching tool that allows students to invest a hypothetical $100,000 online stock portfolio to learn about long-term saving and investing.

Wall Street took another wild ride this week, and unfortunately it appears the coaster has derailed. Trying to highlight the positive has become a bit difficult as the headlines remain pretty gloomy: Unemployment has hit a 25-year high, the Dow and S&P 500 fell to 12-year lows on Thursday and 11% of mortgages are troubled. Well, at least there is news Michael Jackson is returning to the stage in London for his final 10 appearances. (Actually, we think that falls under "bad" news as well -- sorry!)

In light of President Obama's recent budget plan that includes more money for renewable energy, we will focus on the energy sector. The budget proposal includes $15 billion a year for renewable energy programs and a plan to raise $656 billion from a carbon reduction proposal. The plan uses money from a cap-and-trade program, which would allow companies to emit carbon dioxide up to a certain point and then charge them if gases are emitted above the cap, providing, the Obama administration claims, money for middle class tax cuts and investments in renewable energy.

While many companies do not oppose a price tag on carbon emissions, some critics feel companies already battered by the failing economy are in no shape to handle additional taxes.

Companies at the forefront of the current renewable energy discussion are solar and include First Solar (FSLR) and SunPower (SPWRA). First Solar, the developer and maker of photovoltaic modules used to convert sunlight into electricity, has been the leader of the sector and posted impressive returns as well as a strong cash balance during the fourth quarter. SunPower, maker of solar cells and panels for governmental, residential and commercial customers, also reported better-than-expected results for the fourth quarter of last year.

While it should be safe to say these companies will benefit from the Obama budget plan in the long term, many analysts feel they are not immune from the current state of the economy. As David Sterman reports in his recent TheStreet.com article, "First Solar, Evergreen Solar: What You Need to Know," 2009 is not expected to be particularly profitable due to falling demand, financing problems from some of its customers and oversupply within the solar energy sector.

For more information about the energy sector, be sure to check out another TheStreet.com article here. First Solar is highlighted, along with drilling companies such as Halliburton (HAL) and Schlumberger (SLB) -- two companies that most likely would be faring better under a McCain/Palin White House.

In regards to your Stock Market Game students, staying abreast of overall trends in our global economy and researching different industries and sectors are clearly essential in creating a top-performing portfolio this semester. To assist your students in diversifying their portfolios, be sure to check out the Sector/Industry Research Worksheet located in the Teacher Support Center. It encourages students to move beyond consumer companies that comprise the majority of portfolios. The worksheet is accessible in the Teacher's Guide under the Getting Started Section. Click on No. 6, "Where Do I Begin My Research," and you'll find the worksheet located near the bottom of the page.

To learn more about The Stock Market Game, visit www.stockmarketgame.org.

This article was written by a staff member of The Stock Market Game.

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