>> Production funding and educational outreach for Biz Kids is provided by a coalition of America's credit unions, where people are worth more than money.

A complete list of individual credit union funders is available at wxxi.org.

>> Every day, America's credit unions help members with their financial needs and with programs like Invest in America.

It's only fitting that credit unions support Biz Kids because financial education is what we do.

Learn more at lovemycreditunion.org.

>> Okay, I'm in position.

>> We're all set.

Get ready to cover me.

I'm going to make my move for the hill.

( phone ringing ) >> Hey, guys, wait a minute.

I'm getting a text message from my stock site.

I think the prime rate is changing.

Hold on.

>> Austin, Austin, where'd you go?

>> A few quick trades and yes.

Uh-oh.

Guys, you still there?

I'm back.

>> You deserted us.

>> Dude, our corpses are being picked over by vultures as we speak.

>> No, I deselected the vultures.

>> It took us all week to get to that point.

We're back at square one.

Thanks a lot, Bizny McDorkness.

>> Well, while you were having fantasy fun, I was making some real money.

Check out this stock trade.

>> I hate playing with Biz Kids.

>> Not me, because I know who's buying the pizza.

>> Yeah, yeah.

>> ♪ When making money is the aim ♪ These kids they bring their game ♪ They're the Biz Kids Can you dig it?

♪ They know what's up and let you know ♪ Just how to make that dough ♪ They're the Biz Kids Right on ♪ So learn a little more about bringing money through the door ♪ They're the Biz Kids Right on.

♪ >> You've probably heard about the stock market or bonds trading or commodities futures, and what you've heard has probably brought up a question.

>> What does all that mean?

>> Well, no question, stocks, bonds, and commodities and what they all mean are complicated topics.

But they can make more sense if you just think of them as getting a little piece of something big.

>> Exactly.

If you buy stocks, you're buying partial ownership of a big company.

>> Merchandise or service.

>> May I sell you a bond today?

>> If you buy bonds, you're part of a loan to a community or a government organization that helps pay for roads and hospitals.

If you buy commodities, you're pretty much buying farm products or gold or oil or even orange juice, materials that people need.

>> So now you've probably got another question on your mind.

>> What does all that mean for me?

>> Well, a lot of kids own stocks and bonds, maybe as a part of investments they have.

But it's important to remember these are great ways to make money, but they're also great ways to lose a lot of money.

>> Which apparently brings up another question.

>> When do I get something useful to say?

It's a tough business.

>> Hey, Biz Kid, buy some stock.

>> Max.

>> Joe.

>> Alexandra.

>> Andy.

>> Thomas.

>> David.

>> Huh?

>> Ana.

>> McKenzie.

>> Danny.

>> Ally.

>> Lexy.

>> Emma.

>> Luke.

>> Jake, Jake, Jake.

( bell ringing ) >> We're at St. Anne's School, which is on top of Queen Anne in Seattle, Washington.

These kids always surprise me.

It's amazing what they do and how they think.

What are you guys comparing?

>> Oh, we were comparing Google, Apple... >> We were told we were going to compete in a contest.

>> It was called the Smith Barney National Stock Portfolio Contest.

>> I didn't really know much about stock then, so it wasn't that big of a deal to me.

>> I didn't have any idea about stocks really.

>> Look at those peaks.

>> When we buy a stock, we are actually buying a little part of the company.

>> The Smith and Barney program was to teach us how to buy stocks and, like, which one would be the best investment.

>> We were split up into five groups, and each group would pick five stocks.

And we'd research them, find out which one was the best, and each group would put in one of their best stocks.

>> It's a great way for kids to learn about stocks.

They learn how to do the research, what the companies do.

It really gives them a good idea of how the stock market works.

>> The really important part of, like, picking stocks to buy and sell is research.

>> We researched it on the Internet at different Web sites like Yahoo!, Google, MSN.

>> We went online and saw their ten-year progress.

And then we also saw their short-term progress, and we watched how prices rose and fell over time.

>> See if you can find a time every year that it actually is increasing.

Let's go back even further.

Let's see what happens in the spring.

>> We first tried to look at stocks we've heard of and ones that we might be familiar with.

>> My group, we picked Apple, and Apple, it was about to release the iPhone, and so we thought that that would make the stocks go up.

>> My group argued for Nutrisystem.

>> Nutrisystem, we knew that it was for weight loss.

People may want to lose it during the spring so they can maybe do stuff more in the summer.

>> I argued, in my little group, to pick GameStop.

>> GameStop was kind of random, but we're glad we got it, because it split.

>> I had never heard of GameStop.

One of the kids told me what it was.

They sold it, and they actually backed it up with research that it had split the previous year.

And sure enough, during the contest, it split again.

It split again.

>> ♪ Break it down... ♪ >> There are a bunch of kids in our class that were, like, really into it-- like, checking the stocks every day.

>> Some people wanted one stock.

Other people wanted another stock.

Some people actually got kind of mad about it I guess you could say.

>> There were some arguments.

>> Uh-uh, no fistfights.

>> Once we started winning, then I'm like, "Okay, maybe this is pretty, cool," and I got into it.

>> What turned the scales was Apple actually had a shareholder meeting that day.

>> It was really close between us and the first-place team for a really long time.

They had four shares of GameStop, and we only had two.

GameStop went down, like, 20 cents.

They lost 80 cents and we only lost 40.

>> Bam, we won.

>> We won!

( cheering ) >> We're all really happy.

>> We were in the Wall Street Journal.

Some of the local TV stations came out the next day.

It was all over the news that night.

>> Then everyone's like, "Are you serious?"

Like, it just kind of seemed, like, unreal.

>> I was pretty excited.

I wasn't, like, jumping up and down or anything.

I was happy that we won.

>> I learned that buying stocks is a good idea because it can, like, make you money.

>> Anybody can buy a stock if they want to.

>> The stock market's a risk because you can make and lose your money.

>> Research is a key component in choosing the right stocks.

>> Stock... stock market.

( bell ringing ) ( applause ) Stock... >> ...All My Investments, Dr. Drake makes a shocking discovery.

>> Your father's company has gone public.

>> That's right, and I am the primary shareholder.

>> Oh, Desmond, how could you?

>> Simple.

It was a penny stock.

I'm going to buy low and sell high-- very high.

I'm expecting quite a gain, if you know what I mean.

>> A stock is a piece of a corporation.

>> Every American ought to own shares in his... >> See this?

This is a tiny piece of a huge corporation.

This certificate represents 100 shares of stock in an ice-cream company.

If you buy shares of stock, you become a part owner of that company.

>> The money the company gets from selling stock lets it improve and expand its business.

And the cool thing is if the company's successful, your stock goes up.

So let's say this was worth a dollar a share.

Now it's going to be worth $2 a share.

Some people have made a lot of money buying and selling stocks.

>> But stocks also carry risk, which means that if a company is not successful, the price of its stock might drop.

Many companies have gone out of business because the price of their stock went too low, and a lot of people lost a lot of money.

>> Stocks can be a great way for kids to get into investing.

But because they're so much money and it's such a high-risk situation, you should always get expert adult advice before you do anything with stocks.

So where'd you get that, Alex?

>> Oh, it's a gift from my grandpa.

>> Did he get expert adult advice?

>> Dude, my grandpa doesn't even buy ice cream without getting expert adult advice.

>> And would that be your grandma?

>> Yeah, that'd be my grandma.

One thing my grandma always told me, buy low and sell high.

That's a good one.

>> Hi, I'm Willie McLuster, and this is where I do my financing and all my stock trading-- my executive office, shall we say.

I do orienteering.

That's where you have a map.

You have a compass.

I use a thumb compass because it's so much easier, and it looks cool.

The idea of it is to hone your navigation skills so that, one, it's fun, two, so that if you're lost in the woods and you have a compass, you'll be able to hopefully navigate your way out of any situation.

Just like in the markets, you want to have the knowledge, because out here, you do not want to be lost.

>> All I said to William was "I have this money.

You have an interest in the stock market.

Let's play with the money."

>> From there, he and I, we started looking at... you know, into other business ventures and stuff in the stock market, everything from the technology sector to kind of health care.

>> So when we buy stock and it starts up, I tend to chicken out.

"Oh, look at the money.

Let's sell.

Let's sell.

Let's sell."

And he'd say, "No, no, no, it's still going up.

It's still going up."

So we sell some of it and keep the rest of it and let it go up.

>> For example, Dendreon back in the spring of 2007, it was a pharmaceutical company, and they were looking at trying to get the FDA to approve a vaccine for prostate cancer.

And I learned about the company, I started looking at the company, and it looked like they had good feedback from the FDA to get approved.

And so I came to my grandfather, and I said, "We need to invest in this quickly because it's probably going to be approved by the FDA quite rapidly because of how powerful the vaccine would be in the market."

>> We made about $9,700 in that one transaction.

But if I had stayed around, we would have made about $19,000.

>> When I get home at the end of the day, I'll sit down, and I'll just, you know, write up a quick little list.

I'll always have something, you know, at the end of the day just to look back at.

Then I'll go on to, like, Google Finance, or I'll go on to CNN, and I'll do a bit of history on the companies to see if their bottom line is stable, if they're not fluctuating wildly, because I don't want to enter a market that's high risk.

I'll read the Wall Street Journal sometimes and see what they say on some of the larger companies, both in the U.S. and in the world, that are influencing our economy.

That's just how I'll go through the stocks.

The stock market and orienteering are similar because you have to maintain a clear focus on what your goal is.

If you're lost, you need to stop and figure out where you are, what you're doing.

You don't want to take a step just in some blind direction, because you'll find yourself lost either in the market or in the middle of a forest, both of which are bad things.

>> Oh, well, hi.

Stocks are one investment, bonds another.

All investments come with an element of risk.

>> Hi there and welcome to Risk & Reward.

Now, in our last round a year ago, our three contestants each put $1,000 into an investment option of their choice.

We're going to find out how they did.

Let's start with Scott Stockwiler.

Now, Scott, you put your money in company stocks.

How did he do, Johnny?

>> Well, Biff, his stock gained $2 a share, then went down $3 a share, up 50 cents per share, down $2 per share, then up $2.75 per share.

So if you sold it now, you'd get $1,025, Biff.

>> Well, Scott, that is stocks for you-- up and down in the short term, more of a long-term investment.

Now, Betty, you put your investment into municipal and federal treasure bonds.

>> That's right, Biff.

I like safe, certain investments, and I don't mind holding on to them for a while.

>> You're kind of a party commando, aren't you there, Betty?

>> Hm.

>> How did she do, Johnny?

>> Well, Biff, the $1,000 Betty put into the bonds has steadily increased to now be worth $1,034.

That's it.

>> So, Betty, you wanted safe.

You got it.

And now let's go over to Richie Richquick.

Now, Richie, what was your investment?

>> Well, I put $500 into oats commodities and the other $500 into those new, like, Yogi Hogi wizard magic cards.

>> Sounds risky.

Johnny, how did he do?

>> Well, Biff, the oats stayed level until a bad European harvest meant they were more in demand, which brought their value from $500 to $975.

The Yogi Picka Polka whatever cards started rare and valuable, but the manufacturer soon printed millions of them, meaning that $500 pack of cards is now worth $30.

Biff?

>> Well, Richie, big risks brought you big rewards and a big wipeout.

But you did come out $5 ahead.

Join us for the lightning round, where Scott will try insider trading and possibly get arrested, Betty will hold on to her bonds, and Richie... what are you going to do, Richie?

>> I'm thinking soybean futures or lotto tickets.

>> Never mind.

( bull grunting ) ( bear growling ) >> When talking about the stock market, two words come to mind: bull and bear.

>> These terms refer to very up and very down times for traders in the stock market.

But why do we use "bull" and "bear"?

Let's break it down.

>> When confidence is high in the market, value goes up, and that confidence can be contagious.

Investors buy and buy, until eventually they start behaving like a heard-- a heard of wild, stampeding bulls.

That's a bull market.

>> On the other hand, a bear market is when prices drop substantially over a long period of time and investors lose a lot of money.

>> Pork bellies, pork bellies!

Sell, sell, sell!

>> This cycle continues today.

When confidence is high, the bull market buys.

>> So in a bear market, investors sell and, like a bear, hibernate until things get better.

>> One thing is for certain.

Both bulls and bears are powerful animals.

When one deals with them, there's always a certain amount of risk.

>> But a Biz Kid knows you have to take a risk if you want a reward.

>> Who's next?

( bell ringing ) >> So how do you invest in the stock market?

Well, if you're under 18, you'll need the help of a parent or a trusted adult.

And remember, don't invest more money than you can afford to lose.

Stocks can go up, but they can also go down.

But here are some tips to help you make the right choice.

Take a look around you.

What kind of stuff do you know and use every day?

>> There you go.

>> Thank you.

>> You're welcome.

>> Who makes your favorite drink?

What shoes do you love to wear?

( phone ringing ) Hey, I can't talk right now.

Cell phones-- you can even invest in a cell phone company.

The companies that make these products might be great choices, but for kids, it's a lot less risky to start with blue-chip stocks, established companies that have a proven track record.

Once you've picked a company, check them out.

Do some research to see if they really are a good company to invest in.

You can look at their annual report, get info on them online, or even read the newspaper to see what's affecting the industry.

Oh, looks like a good time to invest in cell phones.

The financial pages are a great place to find out how much a stock is selling for and how well it's doing compared to its annual high and low price for the year.

Okay, I know it sounds complicated, but there are lots of books for kids to explain the basics.

And if you're really serious, you can go to an investment firm and get advice.

It's not free, but it might help you make a better choice.

Come on, let's go.

Hi.

I'm interested in buying some stocks.

>> We can help you with that.

>> Well, we haven't covered everything, but it's a start.

But remember the number-one rule: buy low, sell high.

Bye.

So I want to open an account.

>> The name's Bond, Junk Bond-- .007% interest daily.

>> Bonds ratings.

>> Bonds can make a brighter future for every man, woman, and child in America.

>> Hey, look out.

>> This community should put out a bond and build a new bridge.

>> You ever wonder how a community can afford to pay for school and road construction or how a corporation can finance the expansion and upgrade of their facilities?

Well, it's often because they've issued a bond.

>> A bond is a loan to a company or government.

When people buy bonds, they are loaning their money for a set period of time and earning interest on their loan at a set interest rate.

At the end of the time period, they get their money back plus that interest.

>> Now, the main types of bonds are corporate bonds issued by companies, municipal bonds issued by the state or local government, or treasure bonds, issued by the U.S. government.

>> Treasury bonds are the safest bonds to invest in, which makes them perfect for kids to invest in.

Other bonds may have higher interest rates, but they're way riskier.

It's always a good idea to talk to an adult who knows what they're talking about before you invest.

>> Christina, do you want to buy a bond?

I'll issue you one, sell it for $5, and the maturity date will be next Tuesday.

>> A $5 bond?

>> I need lunch money.

>> Dude, why don't you just borrow $5?

>> Well, then you'd be missing out on all the interest.

I mean, you could make what, 15 cents.

Thank you.

>> When it comes to investing, I like to play it safe.

Don't stick all your money in risky investments.

Speaking of risky investments... >> Hey, boss.

>> Brian, what is with the interruption?

I'm talking here.

>> Uh, I got a sweet investment.

My friend just got an ostrich... >> Brian!

>> I'm not a person who likes to take a lot of risks.

You never know when something might drop from the sky.

When I got biking, I make sure to bring all the necessary equipment.

Works for me.

On really bad days, I make sure to wear my safety suit.

I started investing when I was 16 years old in high school.

The younger you start saving, the more interest will compound on your money, and it will grow even faster.

Sometimes for fun, late at night, I like to check out my stock portfolio.

Okay, not really.

I actually like to daydream of a far-off tropical island and vacation.

So how do I get to that island?

Well, I work hard, and I conservatively invest my money in my mutual fund, which is part of my individual retirement account.

An IRA is an individual retirement account.

It's an account where you save your money for when you retire, and the cool part is I'm not taxed on any of the money that goes into my account.

Investing is all about the balance between risky investments and not-risky investments.

The more you risk, the more you could be rewarded, but the more you could also lose.

And the less you risk, the less you lose, but the less you could also be rewarded.

It's your choice.

Remember, I don't like taking risks, so I invest my money in mutual funds, which is a group of stocks and bonds.

And that way, when some of the stocks are high and others are low, it's not very risky, because they all balance out, and my money grows at a lower, steady rate.

I don't make money as fast that way, but it's safer.

When it comes to investing, you don't want to put all of your eggs in one basket.

If this is a bad stock performing, this is what will happen.

When I make my investments, I like to be cautious.

But at some point, Biz Kids, you got to get your feet wet.

The younger you invest, the more chance you have for your money to grow, and that will get you to Hawaii faster, faster, faster, faster, faster... >> You got to learn about the markets-- the markets!

>> Supermarkets?

Food?

Is it time for lunch?

>> No, no, no, I'm not talking about supermarkets.

I'm talking about the financial markets around the world where they trade everything: stocks, bonds, commodities.

>> What's a commodity?

>> It can be anything: oil, minerals, pork bellies.

>> Pork?

We're having pork for lunch?

>> No, they don't eat pork in the financial markets.

They trade it.

That's where they determine the prices.

Everything gets traded: minerals, oil, pork.

The price goes up and down, up and down, based on supply and demand.

And then that money goes all around the world.

That money goes up, up, up, and down and down and all around, all around, and it's all done in the big financial markets around the world-- financial markets!

( bell ringing ) >> Lunchtime, kids.

Don't miss the pork bellies today.

>> I'm changing lives one lunch at a time.

>> In the real world, a commodity can be just about anything: farms, buildings, road construction.

And a lot of times, they are traded like stocks, like these guys trading commodities.

>> Hey, Og, what up?

>> Og sell goat at commodity market.

>> Hey, doing anything fun this weekend?

>> Oh, I'm going to help my mom make a batch of her famous cookies.

>> Oh, those are so good.

I'll buy a couple for a buck.

>> Yeah, can I get half a dozen for $2?

>> We weren't going to make a big batch or anything.

>> Well, I'll buy a dozen for $5.

>> Hey, I want in on this too.

>> It looks like we've got a commodity market going on here, and that's how commodity markets work.

People buy and sell things based on the expected supply of it and the demand for it.

Now, here the commodity is cookies, but in the real world, a commodity can be almost anything, from precious metals like gold and silver, to raw materials like oil, wood, iron, to farm products like soybeans, cotton, meat, fruit, even foreign currency.

Anything that people need or want can be a commodity.

>> Okay, so you've got a dozen for this weekend's batch, and you've got a dozen too, and you'll get in on next week's batch.

>> Thanks a lot.

>> It looks like someone's moving a commodity.

>> Hello.

My name's John Paul, and I'm a financial literacy advocate.

Oh, and I'm a Biz Kid too.

Well, I feel one of the reasons why financial literacy is important is because my generation is going to have to face social security, Medicare, Medicaid, and the national trade deficit.

My generation, if we're going to overcome these challenges, need to have at least basic financial education.

When I was seven, I had just finished reading The Prince and the Pauper, and so I was looking around, but I didn't have another book to read that night, and I found a book called Rich Dad, Poor Dad, a book on accounting and investing.

And so I've continued to learn about finance, and I read all the books I could find.

My company is johnpaulinternational.com.

One of my products is my book called John-Paul's Secret Recipe, and it's designed to teach the real secret recipe of cash flow, which is using money to make money.

Another one of my products is my CD, Life in the Black, which is designed to teach kids today the skills for a rich tomorrow via music.

And another one of my products is my Fine Swine banking system, which is designed to help kids manage their money effectively.

I sell all my products on my Web site called johnpaulinternational.com.

The stock market is a place where you can buy and sell shares of a company, which are called stocks.

A stock is a percentage of ownership in a company.

You can buy it and sell it at different prices for either a profit or a loss, but you'd most definitely want to sell it for a profit.

You need to be able to manage your money correctly and to use that money as a seed, or whatever money you have right now, to grow more money.

So you want to find a stock which has good basics that you can buy at a good price.

I have had the opportunity to talk to several groups and speak at seminars regarding the importance of financial literacy for my generation.

The John-Paul Pigeon Award was given to me for my efforts to educate on the need for financial literacy.

I also received a trading system and this tie.

I think it's very cool.

>> My guest today is our 12- year-old wonder kid John-Paul Pigeon.

He's back.

And now, John-Paul, what's going on in the markets?

>> In China, a scorching factory investment is becoming a worry.

It surged 27%...

I did such a good job in investing, my mom even gave me her money to invest.

>> Here's my retirement fund, son.

Make it grow.

>> And I did.

This is my little brother, Sean- Michael.

Together, we worked on a lemonade stand venture, and we learned that the three ingredients for financial success were learning how to get turned down, learning how to run a successful business, and getting great tips.

Financial solvency-- ah, delicious.

>> It's time for a Biz Kid Biz Quiz.

If you said D, all of the above, congratulations, you're thinking like a Biz Kid.

>> When you buy into financial markets, you're buying a small piece of something really big.

Whether it's shares of a company in the stock market, part of a loan in the bond market, or something in the commodities market, it's your chance to get a small piece of the action.

Or you're dealing with cookies.

>> Dude, these are no ordinary cookies.

These are way better than store- bought.

And I just got my order in.

>> Sounds like Lauren's doing pretty good, yeah?

>> Yeah, it... hey, do you think Lauren would sell me some stock in her cookie business?

>> Does Lauren's cookie business even offer stock?

>> If I invested and bought stock, then I'd be a part owner of the business, and then I could sample cookies from future batches.

>> Well, yeah, but don't you want to buy stock in a company that actually exists?

>> I'm going to go see how many shares I can get.

Three measures spring water.

Just do it like a kung-fu pose, like... >> I blew it!

>> There you go.

>> Yes.

Uh-oh.

>> I'm not having pork for lunch.

It sounds too expensive.

>> The corporation decides it doesn't want to be owned by individuals but by a large group of members of the public, so they incorporate and sell very small shares of ownership to individuals, and that's what a stock is.

>> And I'm the primary shareholder.

>> Hey, do you know a successful business?

>> Maybe you're a Biz Kid.

If so, we want to hear about it.

Got some video?

We want to see it.

>> So check out bizkids.com to find out all the details, and maybe we'll see you on the show.

>> Yeah, like us.

>> What's so special about us?

>> We're on TV.

>> Does make us pretty special.

>> Yeah.

>> Just check out the Web site, because if you're a Biz Kid, we want to hear from you.

>> Production funding and educational outreach for Biz Kids is provided by a coalition of America's credit unions, where people are worth more than money.

A complete list of individual credit union funders is available at wxxi.org.

>> Every day, America's credit unions help members with their financial needs and with programs like Invest in America.

It's only fitting that credit unions support Biz Kids because financial education is what we do.

Learn more at lovemycreditunion.org.

Captioned by Media Access Group at WGBH access.wgbh.org