Tue 12 Jun 2007
After yesterday’s post on the CNBC Contest Controversy, I thought I would share my experience in participating in the contest. Instead of trying to game the contest, I simply had one account and one entry in the contest.
My highest ranking was on two different dates… if you count my highest placement versus my highest percentage rank within the pool of participants.
- April 2 ? 19,000th place, which is the top 3% – return at that point was 20%
- May 9 ? 31,203rd place, which was top 2% – return at that point was 25.87%
My general strategy was fairly simple:
- Pick a single, solid mid-cap stock with potential for upside volatility
- Buy that one stock and hold it for the entire contest — no trailing stops or scaling into/out of positions
- Answer the bonus bucks questions (when I could) and buy more of the same stock
I didn?t want to spend a lot of time on this contest, so this seemed like the right strategy for me. It also matches with my real investing style ? find a good stock and go for a position trade (holding a position for several weeks to several months).
How is this different from my normal trading? Position sizing and risk control ? I put all my eggs in one basket for the contest.
I ended up choosing MineFinders (MFN) as a junior gold stock with some impressive underlying value, and some legs (price movement). I would do well if MFN became a buy-out candidate or had some positive news regarding its mines and properties. It also had the benefit of being at a good entry point for me when the contest started ? near the bottom of a consolidation range, but still near all-time highs.
How did I do? I was honestly expecting to put in a decent showing, maybe somewhere in the top half of all traders… especially considering that there are a lot of day traders who were very active over the duration of contest (the most active stocks were often NEW, CFTC, and other headline grabbers that had 20%+ daily moves). Oh, and almost everyone else apparently had more than one entry/account so they could play different trading strategies at the same time.
Despite all the interest in this contest (it does have a million dollar prize after all), I was able to out perform 96% of the contest entries by buying a single stock.
June 15th, 2007 at 8:24 am
You maximized risk, and thus maximized your potential up-side. Nice move, and nice find for your stock pick – you had some gold and commodity exposure with that one.