SAN MATEO, California—When students at San Mateo High School are asked to sum up their investment strategy, they might deliver the old adage: "Buy low and sell high." But that doesn't begin to cover all that's involved in the Investing in Biotechnology project in which students research and track the most cutting-edge companies in the marketplace.

Teacher Ellyn Daugherty's biotech students are a diverse group, including some of the wealthiest and some of the least-advantaged teens living in a suburb tucked between the Silicon Valley and San Francisco. San Mateo High School dates back a century, but today's students speak some 50 languages and are comfortable using networked computers and the same software that industry experts use to analyze and present data.

It's not a stretch to imagine that someday these kids will have the chance to buy stock in a high-tech company. As Daugherty explains, "Stock options are a common employment benefit in the technology sector." But she cautions that buying stocks can be risky. "How do you know which stocks to buy?"

Students have $1,000 to invest for the class project. The money exists only on paper but the assignment is rooted in the real world.

Students use the Internet to research biotechnology companies and develop investment strategies. They outline the reasons why they select the stocks they pick. They summarize a company's past performance, its future earnings potential, or information about new products about to hit the market. Using spreadsheets, students create a data table to track investments and make a weekly graph of the price per share of their stocks.

At the end of investment cycles (at 60, 90, and 120 days), students calculate their profits and losses, then decide whether to modify their holdings or stand firm. Finally, after 120 days, students prepare a digital presentation which they give to the other "investors" in the class. The discussions cover much more than math.

Students calculate the overall percentage change in their portfolios, but then go on to explain political, financial, and other factors that may have affected their stocks' performance. A company that's about to introduce a new drug after successful clinical trials might seem like a hot prospect to one student. Another, pointing out new worries about bioterrorism, might see the market potential of an older vaccine for smallpox. And in September, when the stock market reacted to world events, everybody's portfolio took a beating.

The cutting-edge class project meshes well with the philosophy of Daugherty, who began her teaching career 22 years ago. "A science teacher," she says, "should interest, motivate, and encourage students. I want them to be as excited and curious about scientific phenomena as I am." Learning and experimenting are the activities that keep her motivated in the classroom. For her students, a little competition drives up interest, too. Although the highest-performing investors receive awards, everybody comes out of the biotech project as a winner.