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Market Crazy, But These Armchair Investors Aren’t With AM-Stocks-Markets, Bjt

October 23, 1987

BOSTON (AP) _ Several of Tim DeMello’s customers lost big bucks in their stock dealings on Black Monday. But unlike the major players who were sweating bullets on Wall Street this week, DeMello’s clients played it cool.

The ups and downs of their market are real. The money isn’t.

DeMello, 28, resigned as a vice president of Kidder Peabody & Co. to form Wall Street Games Inc. in March because he saw a need for games like the Blue Chip Edition, and the soon-to-be marketed International Market Edition, the Options and Futures Edition, and yes, the Pork Bellies Edition.

″You ask any brokerage firm what they want, and they’ll say an educated investor,″ DeMello said Friday. ″When you have the market go down 500 points, like it did Monday, the clients shouldn’t be coming to the broker, saying, ‘Why didn’t you get me out?’

″The investor should be saying, ’Jeez, I understood the risks. The market was overvalued. I should have been short-selling my stocks.‴

DeMello, who needed about $400,000 to establish his Wellesley-based company, made a private stock offering which produced 30 investors. He set up a toll-free telephone number and began selling the Blue Chip Edition on Sept. 1.

Since then, 1,700 people - ages 12 to 74 and with incomes of $12,000 to more than $100,000 - have received a packet detailing the 5,000 publicly traded companies on the New York and American stock exchanges and over-the- counter markets.

Clients, who get $100,000 in fake money for investment, also receive information on how to play the markets, and a toll-free telephone number they can use to call Wall Street Games to talk to the company’s brokers, college students considering careers in finance who are paid $5 an hour by DeMello to give advice.

The annual fee is $99; college students pay $50. DeMello is testing the Blue Chip Edition at his alma mater, Babson College in Wellesley, to determine how it can best be used in classes. Brokerage firms also have expressed interest because their new employees ″know theory of investment, but don’t have the slightest idea how to do it day-to-day,″ DeMello said.

DeMello’s clients receive a monthly account statement, comparing their performance to other clients’ in their own state and to clients throughout the country.

″We wanted to develop something that would have a learn-by-doing process, with the whole emphasis on getting hands-on experience,″ DeMello said. ″You can go out and buy (stock market) board games and use computer simulations, but they pick the variables for you. We don’t have anything to do with that. Here, you’re on your own, with some advice from our brokers.″

Cody Graves, an aide to Sen. David Boren, D-Okla., said he became involved with the game because he had about $3,000 to $4,000 saved, and didn’t think the 5.5 percent to 6 percent interest rate of a money market account was adequate for his needs.

Graves said he had a good month in September ″but took a killing″ in October.

″I’m getting skills, let me tell you,″ Graves said. ″I’m playing around, but I’m doing it for the long-term perspective. You have to develop a tough skin. It’s fun to buy something good and watch it go. It’s not so fun to watch something crater.″

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