1 hour DVD on How I Won The 2009 Financial Post Stock Market Challenge for only $89.95
In this DVD I will show you how you can apply my techniques to have some big success with your own investments!
Friday, November 27, 2009
Doug O'Brien - CSTA Toronto
In this DVD I will show you how you can apply my techniques to have some big success with your own investments!
Friday, February 13, 2009
Winner plans to share secrets - To Host Seminars
Published: Friday, February 13, 2009
The winner of the $25,000 prize for top trader in the Financial Post Stock Market Challenge says he plans to host seminars for investors to show them his winning technique.
After the results were carefully audited by Stock-Trak Group, Doug O'Brien, a 66-year-old retired insurance sales manager from St-Hyacinthe, Que., who played as risingstar, finished the contest with $1,352,678.85 in play money, up 1,253% from the $100,000 that all contestants started with in mid-September. Mr. O'Brien was a full $539,766 ahead of the second-place trader and enjoyed a huge lead in a field of 35,337 registered participants.
The contest awarded a cash prize of $25,000 both to the top investor (fewer than 25 trades) and to the top trader (25 or more trades). Secondplace finishers in each category got $15,000, with $10,000 for third.
"I don't want to manage money," Mr. O'Brien said. "I just want to show them the basics of what I do so they can do it themselves. This is rather lucrative," he added, noting that he received about 150 e-mails from other players in the contest, many of whom wanted to know his secret.
"I've always enjoyed putting on presentations," he said, adding for those interested, he's at obriendoug@hotmail.com. His first public appearance will be in Montreal on March 11, at McGill University's Open Investment Forum.
In the contest, Mr. O'Brien kept his eye on five computer screens, displaying the game, together with feeds from Montreal-based DecisionPlus ( decisionplus.com)and StockWatch ( stockwatch.com).Each day would begin with a careful reading of the Financial Post, and online reading of FP columnist Don Vialoux's Tech Talk site ( dvtechtalk.com),Kitco ( kitco.com)for precious metals and Shark Investing ( sharkinvesting.com).Mr. O'Brien used the sources to help him make up lists of 15 to 25 stocks on the TSX, Nasdaq and NYSE that looked like they would have big moves that day. Since the contest rules did not allow players to short-sell Canadian stocks that traded below $3, Mr. O'Brien said he was forced to turn to the U. S. market, where he found an abundance of high-volume small-cap stocks that could be profitably sold short, he said, but their higher volatility meant he had to trade quickly.
He made nearly the contest limit of 5,000 trades, selling short when stocks were falling and buying when they were rising, then quickly getting out to record a small profit before the market turned against him.
Mr. O'Brien said he averaged a profit of $580 per trade or $14,500 per day, but warned that a $580 profit can disappear in a few seconds.
Not that he is finished. Mr. O'Brien said he intends to continue trading with his own account, just not as frequently. "It's not speculation, it's reality. Hearsay and tips will leave you poor," he said.
The technique brought him the first prize for traders: $25,000 in real money.
"I had no idea I was going to win, at first," Mr. O'Brien said. "I figured I'd be in the top quartile. After a month, I was first and I was looking at the competition and I thought, geez, I thought if I don't screw up or fall sick or take off on holidays, I should win this."
As the contest moved along and Mr. O'Brien's lead grew wider, he reduced his frequency of trading, keeping many of his planned strategies on the shelf. Near the end, as the second-and third-place traders began to make large gains, Mr. O'Brien adjusted his technique, he said.
"Not to brag, but if you beat them by too much, people will say, 'That's ridiculous, there's something wrong here. What trick does he have?' " he said. "Near the end, my girlfriend said I was getting a little too hyper, making too many trades, so I had to relax a little bit."
Mr. O'Brien said the first thing he intends to do with his winnings is to buy a Herman Miller chair, since his back gets sore while he sits at his desk, trading.
Sunday, January 18, 2009
Wednesday, January 14, 2009
Contest leader coasts toward finish line
Richard Morrison, Financial Post
Published: Wednesday, January 14, 2009
Doug O'Brien, the leader in the Financial Post's Stock Market Challenge contest, has been reducing his trading frequency as he glides down the home stretch.
"There's no reason to take big chances now," said Mr. O'Brien, who looks all but certain to win the $25,000 prize for top trader when the contest ends Friday afternoon.
The event, which started in mid-September, awards a cash prize of $25,000 to each of the top investor (fewer than 25 trades) and top trader (25 or more trades). Second-place finishers in each category get $15,000, with $10,000 for third. The prizes will be paid out after the contest administrators, Stock-Trak Group, audit the results.
Mr. O'Brien, who plays as risingstar, has turned$100,000 in play money into $1,295,408, a gain of about 1,200%. He has made 4,237 trades in 121 days.
"The contest has been a real learning experience for me," Mr. O'Brien said.
Until the contest began, Mr. O'Brien said, he had traded only Canadian stocks. Unable to short-sell Canadian stocks that traded below $3 in the contest, he was forced to turn to the U. S. market, where he found an abundance of high-volume small-cap stocks that could be profitably sold short, he said.
The U. S. market's larger volumes and higher volatility mean traders have to move more quickly than they do when dealing in Canadian stocks, Mr. O'Brien said.
The second "fantastic" thing he learned was to take lots of small profits and to sell immediately once a stock's price starts heading below what he paid for it.
"I don't care if there are more profits on the table, I can't stand losses."
Mr. O'Brien said he's averaged a profit of $580 per trade or $14,500 per day, but warns that a $580 profit can disappear in a few seconds.
Some contestants have asked if he seeks out thinly traded stocks, but Mr. O'Brien said that's the opposite of what he looks for. Thin traders are rarely profitable, he said, noting that the first sorting criteria he uses is to identify the 100 stocks that have the highest trading volumes.
His most important buy signal? The share price charts themselves. After looking at charts for several hours every day, he said, he can now determine almost instantly whether or not he's interested in buying.
Mr. O'Brien praised Financial Post columnist Don Vialoux, whose dvtechtalk.com Website he checks before trading begins each morning. "He knows his stuff," Mr. O'Brien said. "He is very good at picking charts that are either going up or going down. Honestly, there's probably one winner in there every day. It's like easy money."
Mr. O'Brien has a comfortable lead over another Quebec contestant, third-place Efrain Saldivia, a 24-year-old telemarketer from nearby St. Hubert, Que., who plays as PeruFace and has turned his initial stake of $100,000 in play money into $684,345, having made 737 trades.
Mr. Saldivia said he credits his younger brother Gary for teaching him everything he knows.
"If you think I am good, you should see my brother," Mr. Saldivia said, adding the two plan on teaming up after the contest ends.
Mr. Saldivia said he ignores fundamentals and focuses strictly on the charts, using Nasdaq.com,Stockcharts.comand Prophet.netto select stocks. He spends about an hour before markets open reviewing what he's going to do, and analyzes things again after markets close.
On weekends, he spends about 15 hours scanning for new gems, learning new techniques and reading books about Jesse Livermore, an early 20th century stock trader who gained and lost several fortunes.
"It doesn't feel like work," Mr. Saldivia said. "It's fun to me. When I place a trade, I don't hesitate. I do it without thinking."
Saturday, December 20, 2008
TSX closure costs contest leader $50k in play funds - Still Ahead 1,143%
Richard Morrison, Financial Post
Published: Friday, December 19, 2008
The technical troubles that shut down the Toronto Stock Exchange on Wednesday resulted in a $50,000 loss for Doug O'Brien, the leader in the financial post.comStock Market Challenge contest. Luckily, it was only play money. "I imagine there were a few people who lost big, real bucks that they couldn't trade," said Mr. O'Brien, a 65-year-old retired insurance sales manager from St. Hyacinthe, Que.
Mr. O'Brien, who plays as rising-star, has turned his initial $100,000 in play money into $1,242,800, for a gain of 1,143% in 95 trading days. His goal is to have an annualized return of 5,000%, and to reach $1.5-million by Christmas.
The contest, which ends in mid-January, awards $25,000 in real money to the top trader, with $15,000 for second place and $10,000 for third. A second set of the three big prizes have been made available to investors -- those with fewer than 25 trades.
Mr. O'Brien's substantial lead in the contest ran into some trouble on Tuesday evening, when he went against his normal practice of not owning any stocks overnight and decided to hold on to five gold and silver mining stocks that looked set to rise when trading began on the TSX on Wednesday. Unfortunately, trading didn't do much more than begin that day, and when gold prices collapsed, Mr. O'Brien could only watch.
"I'm still way ahead of the game," he said, "It's OK, I'll make it up."
Mr. O'Brien has a comfortable lead over another Quebec contestant, Efrain Saldivia, a 24-year-old telemarketer from nearby St. Hubert, Que., who plays as PeruFace and has turned his initial stake of $100,000 in play money into $588,490, having made 579 trades in 95 days.
Mr. Saldivia said he first heard about the contest while listening to the radio in his car -- where he happened to be living this past summer.
Living in his 2000 Ford Focus "wasn't bad at all," he said. "I was in a transition. I was just trying to save up money. It gives you a different perspective of life and the markets, for some reason."
While living in his car, he would place trades in the nearest library or anywhere he could find the Internet, he said. "When I doubled my play money, I then became serious about the competition."
Mr. Saldivia described his strategy as "an accumulation of six years of trading and with skillfully crafted techniques."
He said he uses candlestick charts from Prophet.Net( prophet.net),StockCharts.com( stockcharts.com)and CAN SLIM.net( canslim.net).When the competition is over, Mr. Saldivia said he will fly to the jungles of the Amazon in Peru, where he will train to focus his mind and learn to make better trading decisions. Not that he has not been making some good ones already. "It's more of a spiritual journey," he said.
Wednesday, December 17, 2008
December's Stock Market Challenge Game Newsletter
The temperature is dropping but this contest is getting hotter and hotter. With only one month to go in the competition, the pressure is building on who will become the ultimate Stock Stars come January 16th, 2009.
With the holidays upon us, it presents the perfect time to sit back, relax, grab a cup of cocoa and hunker down on your portfolio. No better way to escape the craziness of the season than immersing yourself in the craziness of the market. Happy Holidays (and trading) from everyone at the Stock Market Challenge.
Armed with an array of five computer screens on his desk, Doug O’Brien watches stocks like a hunter in the woods, waiting for any sign of movement. Mr. O’Brien, the 65-year-old retired insurance sales manager from Ste. Hyacinthe, Que. has dominated the financialpost.com Stock Market Challenge contest by devoting almost every waking minute to watching the market. As of the middle of last week, he had turned his $100,000 in play money into $1,113,000, for a gain of 1,013%, having made an average of just over 40 trades a day in just 87 days.
“You've really got to be concentrating on what you're doing with the charts and with the numbers during the day, not doing other things," Mr. O’Brien said. "The great thing for an old guy like me is that it keeps your mind busy. "The contest, which ends in mid-January, awards $25,000 in real money to the top trader (25 or more trades) and the top investor (24 or fewer trades), with $15,000 for second place in each category and $10,000 for third. While Mr. O’Brien’s success with play money may inspire others to try the same techniques with real money, the odds are against day traders. The day-trading community consists of perhaps the 1% who know what they are doing, like Mr. O’Brien, and a great horde of unemployed folks with delusions of wealth.
For those who might be tempted to quit their day jobs (if they haven’t already been pushed), buy five computers and arrange the screens on a desk and start tapping keys, Mr. O’Brien has a warning: “I play fast and loose with this funny money. It's not real money and I got a good lead, so I take chances that I don't normally take in real life," he said. For example, last Monday, U.S. automakers Ford and GM looked like they were about to receive a generous bailout package, so Mr. O'Brien bought 100,000 shares of each. When the bailout was delayed, the shares plunged, and he lost $5,000 in 60 seconds.
"It's dangerous. You don't do it with the real stuff," he said. Mr. O’Brien begins his day at 7, studying business newspapers, including the Financial Post. Online, Mr. O’Brien goes to:
Financial Post columnist Don Vialoux’s free Tech Talk site (dvtechtalk.com), which offers Mr. Vialoux’s pre-opening comments and details on which stocks began new trends the previous day, along with share price charts he finds interesting.
Montreal-based Kitco Precious Metals, whose Web site, kitco.com, includes dozens of links to the latest gold news, contributed commentaries on precious metals, press releases from mining companies, and fundamental and technical analyses. The hazard here is that an investor may become so engrossed with the material that he forgets to trade at all.
Shark Investing (sharkinvesting.com). Although it has three paid subscription levels – Shark Biotech, for US$650 a year, Shark Investing Pro, US$875 a year, or Shark Platinum, at US$4,995 a year – Mr. O’Brien said he prefers the site’s free information.
"There are a lot of sites that offer something for free to get you interested," he said, "and then if you want the rest you have to pay." He uses the sources to compile lists of a dozen or more stocks on each of the TSX, NYSE and Nasdaq that should make major moves up or down during the coming day.
Mr. O’Brien said he is careful to do all his reading before and after the trading day, lest he be distracted at a moment when he needs to act quickly. “You've really got to be concentrating on what you're doing with the charts and with the numbers during the day, not doing other things," Mr. O’Brien said.
Mr. O’Brien has led the contest almost since its beginning, and has been swamped by requests for tips and advice from other players. In an Oct. 19 post on the contest’s forum, Mr. O’Brien offered a few ideas behind his strategy.
Choose 30 to 40 high volume, volatile stocks to follow.
Use a one-minute graph to follow the trajectory...Since most stocks fluctuate with the market, always watch the Dow and TSX graphs.
Check to see if a change in direction is rapid or slow. “If the move is rapid, I usually resist taking a position since you can quickly be on the wrong side of a trade when the market reverses,” Mr. O’Brien wrote.
When the market moves more slowly, you can buy several stocks, “however, since consistency in the market these days is short lived, always be prepared to sell,” he wrote.
“Don’t wait for the market to turn to start selling since you will not have time to sell all your positions if you wait too long.”
“Never shoot to get the top of the move. A profit is a profit, even a small one. Lots of small profits add up. Also, by trading several stocks at once, you might catch a real rocket and end up with a big score.”
Mr. O’Brien says those who want to learn effective trading techniques should read the Market Wizards series of books by Jack D. Schwager, in which the author interviews successful traders and asks them about their strategies and tactics. The first edition, in 1988, was followed by the New Market Wizards in 1992 and Stock Market Wizards in 2001.
For each of the successful traders in Mr. Schwager’s books, there are thousands more who have been less successful, losing their capital to the dangerous combination of greed and gullibility. Not surprisingly, many day traders have gambling problems.
The U.S. Securities and Exchange Commission’s Web site includes a page “Day Trading: Your Dollars at Risk,” which warns that “most individual investors do not have the wealth, the time, or the temperament to make money and to sustain the devastating losses that day trading can bring.” The site goes on to warn that day traders should only risk money they can afford to lose, and offers a link to the Connecticut Council on Problem Gambling (http://www.ccpg.org) which provides a set of questions to test if you have a gambling problem. “Day trading is an extremely stressful and expensive full-time job,” the site warns, noting that traders must watch the market continuously and pay high commissions for trading, training and computers.
“Day trading strategies demand using the leverage of borrowed money to make profits. This is why many day traders lose all their money and may end up in debt as well. Day traders should understand how margin works, how much time they’ll have to meet a margin call, and the potential for getting in over their heads.”
It goes on to warn against “hot tips” and “expert advice.” “Remember that “educational” seminars, classes, and books about day trading may not be objective. Find out whether a seminar speaker, an instructor teaching a class, or an author of a publication about day trading stands to profit if you start day trading.”
Richard Morrison, Financial Post
December 16th, 2008
from: December's Stock Market Challenge Game Newsletter
With the holidays upon us, it presents the perfect time to sit back, relax, grab a cup of cocoa and hunker down on your portfolio. No better way to escape the craziness of the season than immersing yourself in the craziness of the market. Happy Holidays (and trading) from everyone at the Stock Market Challenge.
Armed with an array of five computer screens on his desk, Doug O’Brien watches stocks like a hunter in the woods, waiting for any sign of movement. Mr. O’Brien, the 65-year-old retired insurance sales manager from Ste. Hyacinthe, Que. has dominated the financialpost.com Stock Market Challenge contest by devoting almost every waking minute to watching the market. As of the middle of last week, he had turned his $100,000 in play money into $1,113,000, for a gain of 1,013%, having made an average of just over 40 trades a day in just 87 days.
“You've really got to be concentrating on what you're doing with the charts and with the numbers during the day, not doing other things," Mr. O’Brien said. "The great thing for an old guy like me is that it keeps your mind busy. "The contest, which ends in mid-January, awards $25,000 in real money to the top trader (25 or more trades) and the top investor (24 or fewer trades), with $15,000 for second place in each category and $10,000 for third. While Mr. O’Brien’s success with play money may inspire others to try the same techniques with real money, the odds are against day traders. The day-trading community consists of perhaps the 1% who know what they are doing, like Mr. O’Brien, and a great horde of unemployed folks with delusions of wealth.
For those who might be tempted to quit their day jobs (if they haven’t already been pushed), buy five computers and arrange the screens on a desk and start tapping keys, Mr. O’Brien has a warning: “I play fast and loose with this funny money. It's not real money and I got a good lead, so I take chances that I don't normally take in real life," he said. For example, last Monday, U.S. automakers Ford and GM looked like they were about to receive a generous bailout package, so Mr. O'Brien bought 100,000 shares of each. When the bailout was delayed, the shares plunged, and he lost $5,000 in 60 seconds.
"It's dangerous. You don't do it with the real stuff," he said. Mr. O’Brien begins his day at 7, studying business newspapers, including the Financial Post. Online, Mr. O’Brien goes to:
Financial Post columnist Don Vialoux’s free Tech Talk site (dvtechtalk.com), which offers Mr. Vialoux’s pre-opening comments and details on which stocks began new trends the previous day, along with share price charts he finds interesting.
Montreal-based Kitco Precious Metals, whose Web site, kitco.com, includes dozens of links to the latest gold news, contributed commentaries on precious metals, press releases from mining companies, and fundamental and technical analyses. The hazard here is that an investor may become so engrossed with the material that he forgets to trade at all.
Shark Investing (sharkinvesting.com). Although it has three paid subscription levels – Shark Biotech, for US$650 a year, Shark Investing Pro, US$875 a year, or Shark Platinum, at US$4,995 a year – Mr. O’Brien said he prefers the site’s free information.
"There are a lot of sites that offer something for free to get you interested," he said, "and then if you want the rest you have to pay." He uses the sources to compile lists of a dozen or more stocks on each of the TSX, NYSE and Nasdaq that should make major moves up or down during the coming day.
Mr. O’Brien said he is careful to do all his reading before and after the trading day, lest he be distracted at a moment when he needs to act quickly. “You've really got to be concentrating on what you're doing with the charts and with the numbers during the day, not doing other things," Mr. O’Brien said.
Mr. O’Brien has led the contest almost since its beginning, and has been swamped by requests for tips and advice from other players. In an Oct. 19 post on the contest’s forum, Mr. O’Brien offered a few ideas behind his strategy.
Choose 30 to 40 high volume, volatile stocks to follow.
Use a one-minute graph to follow the trajectory...Since most stocks fluctuate with the market, always watch the Dow and TSX graphs.
Check to see if a change in direction is rapid or slow. “If the move is rapid, I usually resist taking a position since you can quickly be on the wrong side of a trade when the market reverses,” Mr. O’Brien wrote.
When the market moves more slowly, you can buy several stocks, “however, since consistency in the market these days is short lived, always be prepared to sell,” he wrote.
“Don’t wait for the market to turn to start selling since you will not have time to sell all your positions if you wait too long.”
“Never shoot to get the top of the move. A profit is a profit, even a small one. Lots of small profits add up. Also, by trading several stocks at once, you might catch a real rocket and end up with a big score.”
Mr. O’Brien says those who want to learn effective trading techniques should read the Market Wizards series of books by Jack D. Schwager, in which the author interviews successful traders and asks them about their strategies and tactics. The first edition, in 1988, was followed by the New Market Wizards in 1992 and Stock Market Wizards in 2001.
For each of the successful traders in Mr. Schwager’s books, there are thousands more who have been less successful, losing their capital to the dangerous combination of greed and gullibility. Not surprisingly, many day traders have gambling problems.
The U.S. Securities and Exchange Commission’s Web site includes a page “Day Trading: Your Dollars at Risk,” which warns that “most individual investors do not have the wealth, the time, or the temperament to make money and to sustain the devastating losses that day trading can bring.” The site goes on to warn that day traders should only risk money they can afford to lose, and offers a link to the Connecticut Council on Problem Gambling (http://www.ccpg.org) which provides a set of questions to test if you have a gambling problem. “Day trading is an extremely stressful and expensive full-time job,” the site warns, noting that traders must watch the market continuously and pay high commissions for trading, training and computers.
“Day trading strategies demand using the leverage of borrowed money to make profits. This is why many day traders lose all their money and may end up in debt as well. Day traders should understand how margin works, how much time they’ll have to meet a margin call, and the potential for getting in over their heads.”
It goes on to warn against “hot tips” and “expert advice.” “Remember that “educational” seminars, classes, and books about day trading may not be objective. Find out whether a seminar speaker, an instructor teaching a class, or an author of a publication about day trading stands to profit if you start day trading.”
Richard Morrison, Financial Post
December 16th, 2008
from: December's Stock Market Challenge Game Newsletter
Tuesday, December 2, 2008
Market Challenge leader posts 975% return
Richard Morrison, Financial Post
Published: Tuesday, December 02, 2008
With six weeks to go in the contest, Doug O'Brien, the 65-year-old retired insurance sales manager from St. Hyancinthe, Que., continues to dominate the financialpost.comStock Market Challenge, with a portfolio of $1,075,000 in play money as of yesterday's close, a 975% return in just 78 trading days. The contest, which ends in mid-January, awards $25,000 in real money to the top trader (25 or more trades) and the top investor (24 or fewer trades), with $15,000 to second place and $10,000 for third in each category.
Mr. O'Brien, who plays as rising-star, watches five computer screens arranged on his desk, displaying the game, Montreal-based DecisionPlus ( decisionplus.com)and StockWatch ( stockwatch.com).There is nothing keeping other contestants from assembling the same information sources, but Mr. O'Brien has outpaced them, having amassed a portfolio of more than twice that of the second-place contestant. The secret to his success?
"It's work, work, work," he said yesterday, noting he begins studying the market at 7 a. m. to prepare for when markets open at 9:30.
His days begin with a thorough reading of the Financial Post, CNN Business News, Financial Post columnist Don Vialoux's timing the market Tech Talk site, ( dvtechtalk.com),Kitco ( kitco.com)for precious metals, and Shark Investing ( sharkinvesting.com).The sources help Mr. O'Brien to make up and adjust lists of 15 to 25 stocks on the TSX, Nasdaq and NYSE that should offer good potential to rise -- or in the case of short positions, fall--during the day. The third-ranked trader and fourth overall is Stan Heller of Lethbridge, Alta., who retired as a hotel administrator in September. Mr. Heller, who plays as Sheller, has just completed the Canadian Securities Course with a view to entering the financial industry, has a portfolio of $427,750, for a gain of 328%.
Mr. Heller said he reads Canadian newspapers together with Investors Business Daily for global perspectives and stock-picking ideas, and uses an "amazing" software program called VectorVest ( vectorvest.com)for further research. Melissa Moore, a 30-year-old registered nurse in Toronto who plays as lexiwins, was the third investor and seventh-ranking player overall, with a portfolio of $349,750 after yesterday's close -- a considerable feat given that she has made just 14 trades.
"I have not changed my strategy," she said. "I have not traded anything recently, I just hope the stocks continue to rise in the future. Fortunately since I started there has been a steady rise in National City Corp. and the past week has been no different."
Mathieu Lagarde, a 29-year-old associate investment counsellor in Boisbriand, Que., plays as Mtrader. He had amassed a portfolio of $341,623 after 439 trades, for a gain of 241.6% as of yesterday's close, putting him in fifth place among traders and in eighth place overall.
"I'm still using most of the same strategies, pair trading and call from my black box model, which at a time was playing it short, now it is much more sideways," he said.
Mr. Lagarde said he has an advantage in being an associate investment counsellor in that he can check the market whenever he likes. Players without that access can lose 10% to 15% in an hour or two, he said, adding that stop-loss orders don't work well in see-saw markets.
Players need not fear volatility and should be patient, sticking to their original plan, he said. "The old theory of cut your losses, let your profits run is probably not working as well as it did in the past with the current volatility."
Saturday, November 22, 2008
Stock game hotshot passes $1-million
Richard Morrison, Financial Post
Published: Saturday, November 22, 2008
Sometime around 3 o'clock yesterday afternoon, Doug O'Brien became a millionaire.
Mr. O'Brien, a retired insurance sales manager from St. Hyacinthe, Que., has a commanding lead in the financial post.com Stock Market Challenge contest, with a portfolio of $1,007,749.37 in play money.
"It's a wild market," he said. "As far as I'm concerned, right now there are no fundamentals."
Even technical chart signals have little use, he said, noting that he trades based on a stock's current momentum, regardless of the reason behind the movement.
"It's not normal trading, but you have to adjust. You go with the fear and the greed."
Mr. O'Brien said he had made a nice profit by selling out half his positions on Thursday, and with $985,000 at the end of the day, was near the target of $1-million target he had set for the end of the week. But he kept his short sale positions on Royal Bank and Bank of Nova Scotia overnight, which cost him $10,000 as the markets opened yesterday. "But I kept one and I finally made it back up to $980,000," and with a few more trades, he was over the $1-million mark.
The contest, which ends in mid-January, awards a first prize of $25,000 in real money to the top trader (25 or more trades) and the top investor (24 or fewer trades), with $15,000 for second place and $10,000 for third in each category.
Contestants are limited to a maximum of 5,000 trades. Mr. O'Brien, who has made 2,907 (an average of about 43 a day), said he is restraining his activity so he does not run into problems as the contest winds down.
His real-money investment portfolio, in which he averages only a few trades a day, is also doing well, he said. Mr. O'Brien said there is "definitely" some overlap between the real and contest portfolios -- "it's the same stocks that are moving" -- but trading large amounts of a small-cap stock in real life will move the price, where it does not in the contest.
In second place overall and the top investor is Martyn, a CBC employee in Toronto who plays as funnycbcguy, with $562,742.05 after 24 trades.
In an e-mail, Martyn said his portfolio has been on a wild ride since he shorted General Motors Corp. (GM/ NYSE).
"We'll see where it ends up. My wife, on the other hand, went long on oil. What was she thinking?"
In third place, playing as Sheriff, with $384,696.71, is accountant Garth Sheriff from Oshawa, Ont.
Mr. Sheriff said he has sold all the commodities short, "which has turned out pretty well so far, but the market could swing the other way any day."
Dave Smethurst, a 43-year-old Vancouver-based IT consultant playing as kndata, was the fourth-best investor (10th overall) as of the end of trading yesterday, with $301,659.05.
"The time to buy will be in 18 months when the stock indexes (S&P, DJIA, FTSE, TSX) cross the 200-day moving average. Another indicator is when the media 'perma bulls' that have been calling a bottom every month since September, 2007, become bears," he said.
Media pundits "are constantly picking a bottom at the top of a bear rally (the worst time to go long). The mainstream media are reporting history (fair enough); the bloggers are the only ones that have correctly predicted the events to date."
Maria W., who lives in Ottawa and is on maternity leave from the federal government, plays as mariasa. She has slipped to the sixth investor spot (11th overall):
"I have not traded since my last e-mail," she said. "I continue to check in every now and then and am pretty happy with where I am. I've been pretty lucky so far but there's still lots of time for me to get overtaken. As my husband always says, you don't want to count your goslings before they're born."
Friday, November 14, 2008
November's Stock Market Challenge Game Newsletter
We are halfway through the financialpost.com Stock Market Challenge with two months to go and still lots of exciting game play to come!
The last month has been an extremely volatile one in terms of the market, proving to be a great challenge for every trader and investor.
But keep trading & investing those stocks, your hard work will pay off.
With a comfortable lead nearly halfway through the Financial Post Stock Market Challenge contest, Doug O'Brien, a 65-year-old retired insurance sales manager from St. Hyacinthe, Que., has reduced the frequency of his trading and opted for a slightly more conservative approach.
After markets closed Nov. 10, Mr. O'Brien, who plays as risingstar, had turned his $100,000 in play money into $873,123, a 773% gain, and sat well ahead of the second-place player, a CBC employee who wants only to be known as Martyn, playing as funnycbcguy, with $421,102. Both players had General Motors as their most recent trade.
The contest, which ends in mid-January, awards $25,000 in real money to the top trader (25 or more trades) and the top investor (24 or fewer trades), with $15,000 for second place and $10,000 for third in each category.
With $873,000, Mr. O'Brien's lead looks nearly insurmountable, given that only three players have portfolios of more than $300,000. Indeed, in these horrible markets, only 18% of players have more than the $100,000 starting amount and fully 82% have lost money.
Mr. O'Brien's desk is arrayed with five computers. The screens, which feature feeds from Montreal-based DecisionPlus (decisionplus.com) and Stockwatch (stockwatch.com) along with the Stock Market Challenge itself, give him up-to-the minute feedback on what markets are doing and help him to indentify stocks with volatile share prices.
Mr. O'Brien has so far shown superior skill and he has been on top for too long to call it luck, being able to rapidly short-sell volatile stocks when markets are falling and to buy when markets are rising, holding them just long enough to make a profit. His strategy has worked best when the markets are most volatile at what he describes as a swinger's market. In less volatile markets, Mr. O'Brien says he becomes more of a stock picker, which he says is his real strength.
Contestants are limited to 5,000 trades, and Mr. O'Brien, who has made about 2,500 trades already, has been keeping a close eye on his trading frequency to ensure he can still buy, sell and sell short in the final week of the contest in mid-January.
As a retiree, Mr. O'Brien begins trading when markets open and rarely leaves his desk until they close. But other top players with full-time jobs and other commitments cant watch the market nearly so closely, making their performance all the more remarkable.
To win the separate $25,000 first prize for investors, contestants must keep the number of trades below 25, which means the player must successfully determine which stocks are likely to move in the predicted way over the life of the contest is a tall order.
Among the leaders who cant be at a computer terminal all day is Melissa Moore, a 30-year old registered nurse from Toronto who plays as lexiwins.
She was in third place as of Nov. 10, with $383,691, a 284% gain, despite having to attend to hospital patients.
Ms. Moore says she follows a simple strategy: look for a volatile stock with huge recent losses and high volume and bet everything on it in hopes it rebounds.
Its a gamble, and I could have just as likely ended up at the very bottom, but I think that in order to win this contest as an investor, you have to take big risks in volatile stocks, she said in an e-mail.
Most of the top investors have achieved success by following a similar strategy: identifying a single volatile stock and buying it just before it skyrockets or by short-selling it just before it plunges. That appears to involve an ability to forecast the future you might normally dismiss as pure luck, or randomness. After all, regardless of how large or small the field, somebody has to be in the lead. But the leaders have one universal characteristic: all are keen followers of the news. Their success seems to be linked to an exceptional ability to quickly determine how shareholders will react to events and to buy before the reaction takes hold.
Richard Morrison, Financial Post
November 13, 2008
from: November's Stock Market Challenge Game Newsletter
The last month has been an extremely volatile one in terms of the market, proving to be a great challenge for every trader and investor.
But keep trading & investing those stocks, your hard work will pay off.
With a comfortable lead nearly halfway through the Financial Post Stock Market Challenge contest, Doug O'Brien, a 65-year-old retired insurance sales manager from St. Hyacinthe, Que., has reduced the frequency of his trading and opted for a slightly more conservative approach.
After markets closed Nov. 10, Mr. O'Brien, who plays as risingstar, had turned his $100,000 in play money into $873,123, a 773% gain, and sat well ahead of the second-place player, a CBC employee who wants only to be known as Martyn, playing as funnycbcguy, with $421,102. Both players had General Motors as their most recent trade.
The contest, which ends in mid-January, awards $25,000 in real money to the top trader (25 or more trades) and the top investor (24 or fewer trades), with $15,000 for second place and $10,000 for third in each category.
With $873,000, Mr. O'Brien's lead looks nearly insurmountable, given that only three players have portfolios of more than $300,000. Indeed, in these horrible markets, only 18% of players have more than the $100,000 starting amount and fully 82% have lost money.
Mr. O'Brien's desk is arrayed with five computers. The screens, which feature feeds from Montreal-based DecisionPlus (decisionplus.com) and Stockwatch (stockwatch.com) along with the Stock Market Challenge itself, give him up-to-the minute feedback on what markets are doing and help him to indentify stocks with volatile share prices.
Mr. O'Brien has so far shown superior skill and he has been on top for too long to call it luck, being able to rapidly short-sell volatile stocks when markets are falling and to buy when markets are rising, holding them just long enough to make a profit. His strategy has worked best when the markets are most volatile at what he describes as a swinger's market. In less volatile markets, Mr. O'Brien says he becomes more of a stock picker, which he says is his real strength.
Contestants are limited to 5,000 trades, and Mr. O'Brien, who has made about 2,500 trades already, has been keeping a close eye on his trading frequency to ensure he can still buy, sell and sell short in the final week of the contest in mid-January.
As a retiree, Mr. O'Brien begins trading when markets open and rarely leaves his desk until they close. But other top players with full-time jobs and other commitments cant watch the market nearly so closely, making their performance all the more remarkable.
To win the separate $25,000 first prize for investors, contestants must keep the number of trades below 25, which means the player must successfully determine which stocks are likely to move in the predicted way over the life of the contest is a tall order.
Among the leaders who cant be at a computer terminal all day is Melissa Moore, a 30-year old registered nurse from Toronto who plays as lexiwins.
She was in third place as of Nov. 10, with $383,691, a 284% gain, despite having to attend to hospital patients.
Ms. Moore says she follows a simple strategy: look for a volatile stock with huge recent losses and high volume and bet everything on it in hopes it rebounds.
Its a gamble, and I could have just as likely ended up at the very bottom, but I think that in order to win this contest as an investor, you have to take big risks in volatile stocks, she said in an e-mail.
Most of the top investors have achieved success by following a similar strategy: identifying a single volatile stock and buying it just before it skyrockets or by short-selling it just before it plunges. That appears to involve an ability to forecast the future you might normally dismiss as pure luck, or randomness. After all, regardless of how large or small the field, somebody has to be in the lead. But the leaders have one universal characteristic: all are keen followers of the news. Their success seems to be linked to an exceptional ability to quickly determine how shareholders will react to events and to buy before the reaction takes hold.
Richard Morrison, Financial Post
November 13, 2008
from: November's Stock Market Challenge Game Newsletter
Wednesday, November 12, 2008
Now's the time to play it more conservatively - Leader's Strategy
Richard Morrison, Financial Post
Published: Saturday, November 08, 2008
Doug O'Brien, the leader in the Financial Post Stock Market Challenge contest, has slowed his trading pace and now holds only one stock at a time, selling once the trend begins to move against him.
"I'm way ahead of the game," he said. "There's no sense in giving it away, so I'm being a bit conservative."
The 65-year-old retired insurance sales manager from St. Hyacinthe, Que., who plays as risingstar, has turned his $100,000 in play money into $878,000, adjusting his trading patterns to the level of volatility in the market.
"If the market goes the other way, you have to go the other way," he said, citing Agrium Inc. (AGU/TSX) as an example. The fertilizer maker reported excellent results on Wednesday, yet its shares slid simply because the market was falling.
The contest, which ends in mid-January, awards $25,000 to the top investor (fewer than 25 trades) and the top trader (25 or more trades), with $15,000 for second place and $10,000 for third in each category.
Other players have inquired if Mr. O'Brien might be willing to manage their money since he's achieved a 778% return over just 54 trading days. Although he has an MBA and probably would not have to do much to meet the legal requirements of a portfolio manager, he said right now, it's not in his plans.
"But who knows? Once we're through with this contest, I'll be open to any ideas."
After 2,480 trades, Mr. O'Brien is nearly $500,000 ahead of the second overall contestant and top investor, 30-year-old Melissa Moore, a Torontobased registered nurse who plays as lexiwins.
Ms. Moore, however, has made just 14 trades to achieve her $383,000, for a 283% gain.
"My strategy so far is simple: Look for a volatile stock with huge recent losses and high volume and bet everything on it, with the hopes that it will go up in the future," she said.
"It's a gamble, and I could have just as likely ended up at the very bottom, but I think that in order to win this contest as an investor, you have to take big risks in volatile stocks. I just happened to luck out with National City and its preferred shares," she said, referring to Cleveland, Ohio-based financial holding company National City Corp. (NCC/NYSE). Its common shares have suffered along with those of other U. S. banks, but its preferreds have risen to US$22.68 from US$8 in just three weeks.
The second-place trader behind Mr. O'Brien is Kirby Walker of Victoria, B. C., who plays as zack16. He had turned his $100,000 into $269,000 through 356 trades, for a 169% gain, good for eighth place overall.
Mr. Walker, the co-founder of West Coast Monuments, said starting his own company has taught him the fundamentals of business finance and to trust his instincts about risk.
"The whole current market situation is very reminiscent of the dot.combubble, with a broader scope," he said. At the beginning of the contest, Mr. Walker shorted many banking and finance stocks -- a lucrative strategy. Three weeks in, Mr. Walker said, he began to notice markets had become guided more by emotion than common sense, and he adjusted his trading to take advantage of it.
"Instead of trading on fundamentals, I was betting on people's emotions. I was buying and selling stocks for just a few minutes, hours, or maybe for a day, and then flipping them."
Mr. Walker said he made only two trades this week: a quick flip of Mercator Minerals Ltd. (ML/TSX), and a longer term buy of 5Nplus Inc. (VNP/TSX).
"At the time of writing, VNP is the only stock I plan on holding onto for the remainder of the contest as the fundamentals of this stock are overwhelmingly positive."
Wednesday, October 29, 2008
Volatility makes for a 'swinger's market' - Buy And Sell Fast
Richard Morrison, Financial Post
Published: Wednesday, October 29, 2008
Doug O'Brien, a 65-year-old retired insurance sales manager from St. Hyacinthe, Que., maintains his commanding lead in the financialpost.com Stock Market Challenge.
Mr. O'Brien, who plays as rising-star, had turned his $100,000 in play money into $830,595 as markets closed yesterday, for a gain of 731% in 44 trading days. The second-place player is $442,000 behind.
"It's a swinger's market," said Mr. O'Brien, referring to the volatility that makes it too dangerous to hold on to a stock for more than a few hours.
Mr. O'Brien said he tries to identify the most volatile stocks, buying them or going "long" when markets are rising, then switching to a short-selling position in a matter of hours or even minutes. The strategy requires constant vigilance, said Mr. O'Brien, who rarely leaves his desk -- arrayed with five computer screens -- during trading hours.
"I'd rather have a stock-picker's market where you can keep the stock for several days," he said. "I read the technicals on a stock and I can usually tell whether it's going up or down, but in this case you just go with the market."
Normally, Mr. O'Brien said, he's careful not to be invested in anything at the end of the trading day, in case the market moves against him on the opening. On Monday afternoon, he said, he took a chance and shorted a stock, only to see it rise immediately the next day -- a move that cost about $10,000.
"I think we've had a double bottom in the markets and we may be on our way up," he said.
The contest, which ends in mid-January, awards $25,000 in real money to both the top trader (25 or more trades) and the top investor (fewer than 25 trades), with $15,000 for second place and $10,000 for third in each category.
The second-place investor and third overall is Maria W., who plays as mariasa. Her portfolio was worth $362,357 at yesterday's close, for a gain of 262%.
"If only my own portfolio had been doing as well," she said. Maria works for the federal government but said she is home in Ottawa on maternity leave, and alternates her trading with taking care of nine-month-old Olivia.
"So far, I've limited myself to very few trades -- all relating to Wachovia. So I'd have to say Olivia is taking up quite a bit more time than the trading," she said.
"I've been fully invested in Wachovia since the beginning. I really thought the chance of a buyout was good, so I put all my marbles in one basket, so to speak."
Maria's husband, Jason, has also entered the contest, "but he is not doing well at all, much to his chagrin," she said. "This gives me dinnertime bragging rights, for now at least."
For much of yesterday, Dave Smethurst, a 43-year-old Vancouver-based IT consultant playing as kndata, was the top investor and in second place overall with a $400,000 portfolio, then plunged to ninth place with a portfolio worth a little over $269,000 at the close. His latest trade is given as Hudson Resources (HUD/TSX-V), which fell 30% yesterday, falling from $1 to 70¢.
Many of the leading contestants do not want to be identified. Although they have not offered specific reasons, we can make some assumptions.
First, stock markets open at 9:30 a. m. ET and close at 4 p. m. ET. That means that unless they are retired, unemployed or work nights with little sleep, active traders who have day jobs must line up their trades before going to work, unless they work in Western Canada. The alternative is to play the game on company time.
If, for example, you are scheduled for a heart bypass and just before the anesthetic takes hold, you see your surgeon tapping frantically into a laptop beside the operating table and hissing "sell! sell! sell!" there is a good chance he's playing the financialpost.com Stock Market Challenge.
Second, for active traders, it's an advantage to have access to real-time stock-market information. What sort of folks have this? And noting point number one above, who might be able to access these data during working hours?
Many of the leaders describe their occupations as information technology specialists -- computer geeks who are obviously playing the game when they should be.... Come to think of it, no one knows what IT specialists do, anyway.
Other successful players would rather be shot dead than reveal their names, yet they have sloppily provided the contest organizers with e-mail addresses that look suspiciously like the names of major Canadian banks and investment dealers. It might also explain why you're having trouble reaching your broker.
As for me, desperate times call for desperate moves: The Horizons BetaPro series of geared, or leveraged, exchange-traded funds, which provide twice the momentum of the underlying index -- up or down.
Friday, October 24, 2008
Leader appears incontestable - 588% Gain In 24 Days
"Doug O'Brien trades from his apartment in St. Hyacinthe, Que. He is the current leader in the Financial Post's Stock Market Challenge contest (15 000 participants), having turned $100,000 into almost $690,000 in 24 trading days."
Richard Morrison, Financial Post
Published: Thursday, October 09, 2008
Doug O'Brien's lead in the financial post.comStock Challenge contest looks almost insurmountable, even though we're only one-sixth of the way through the 18-week event. By yesterday's market close, Mr. O'Brien, who plays as "risingstar," had turned the $100,000 in play money he started with in mid-September into $688,185.55, a gain of 588% in just 24 trading days, well ahead of the second-place participant with $293,203. Another 10 contestants have amassed $200,000 or more.
The contest, which ends in mid-January, awards a $25,000 cash prize to the top trader (more than 25 trades) and the top investor (less than 25 trades), with $15,000 going to the second-place finisher in each category and $10,000 for third. Contestants can buy any stock or exchange-traded fund listed on the TSX, NYSE, Nasdaq or AMEX.
Mr. O'Brien's week started off with a bang: His portfolio briefly shot past $750,000 as markets crashed on Monday.
"I had about 10 stocks that I was short at the beginning of the day and I really did well," he said in an interview. "The market went down the tubes."
By late that afternoon, he had made close to $100,000 and would have made nearly $30,000 more, "but I made a couple of little booboos that I don't normally make. I guess I was getting a little overconfident."
The 65-year-old retired insurance sales manager from St. Hyacinthe, Que., said he missed a similar opportunity to widen his lead on Tuesday. "Nothing was going on and around three o'clock I sort of slouched off, and if I'd stayed there another half hour I would've made another 50 grand at least."
Mr. O'Brien, who has been averaging 60 trades a day, said he reviewed the rules and was surprised to discover players are limited to 5,000 trades over the life of the contest, which means he will have to limit his trading activity.
He spends his weekdays watching computer screens arrayed around his desk in his apartment, tapping in orders to buy, sell or sell short, depending on the direction of the market and the speed of its movement. The greater the volatility, the faster the profits roll in, but timing comes down to seconds, he said.
"When I see it turning, that's when I go," he said. "You don't wait, because you only have so much time, especially if the market is turning."
Once all his stocks start to reverse direction, he will frantically try to sell them all, "but it takes a minute to get a sale made. I'm usually on the edge of my seat."
Mr. O'Brien said he uses one computer to make his Stock Challenge contest trades, while another carries charts and other market-monitoring software from Montreal-based DecisionPlus ( decisionplus.com).The two screens to Mr. O'Brien's left display Vancouver-based StockWatch ( stock-watch.com),which collects and disseminates business news. Mr. O'Brien said he doesn't take the same chances with his real-money portfolio, but it does hold his favourite stocks.
A comparison with other investors' real-money portfolios would probably look similar to the contest results, he admitted. "I'd probably be on top."
Profiting from volatility - Gems To Be Found
Richard Morrison, Financial Post
Published: Friday, October 03, 2008
Shell-shocked investors have been terrified by this week's market gyrations -- unless they've been using play money.
Leaders in the financialpost.com's Stock Market Challenge stock-picking contest have shrewdly managed their portfolios so that most of last week's top 10 players are still near the top of the leaderboard, with only a minor shifting of places.
"A number of them cashed out or limited their positions in light of the turmoil," said Rory Olson, CEO of Stock-Trak Group Inc., the company responsible for developing the software that powers the game.
"All of the leaders have been trading the financials, with traders riding each up/down wave with long and short positions," Mr. Olson said in an e-mail.
Contestants start with $100,000 in play money and can buy any stock or exchange-traded fund listed on the TSX, NYSE, Nasdaq or AMEX. The first prize of $25,000 goes to the best trader (more than 25 trades) and the best investor (fewer than 25 trades) when the contest ends in mid-January.
The leader, who has turned his $100,000 into an astounding $563,171 in just 14 trading days for a 463% gain, is risingstar, also known as Doug O'Brien, a 65-year-old retired insurance sales manager from St. Hyacinthe, Que.
Mr. O'Brien said he profited from the extreme volatility of the past week. "I'm back on top. It has never been this good."
Mr. O'Brien said he traded whatever was moving this week, keeping up-to-date by using the Financial Post.
"There are trading gems to be found every day. I picked up two today. Do not ask which ones," he said.
On U. S. markets, Mr. O'Brien said he briefly owned American International Group Inc. (AIG/NYSE), JPMorgan Chase&Co. (JPM/NYSE), Energy Conversion Devices Inc. (ENER/NASDAQ), Apple Inc. (AAPL/ NASDAQ) and Nike Inc. (NKE/NYSE).
On the TSX, he bought and sold Goldcorp Inc. (G/TSX), Agnico-Eagle Mines Ltd. (AEM/TSX), Questerre Energy Corp. (QEC/TSX),
Agrium Inc. (AGU/TSX),Research In Motion Ltd. (RIM/TSX) and Grande Cache Coal Corp. (GCE/TSX).
Mr. O'Brien said he increased his activity to an average of 65 trades per day, "making the most of it while the market rattles and rolls. Many small profits beat the hell out of big, bad losses. A profit is a profit. Sell, sell, sell is my motto."
Luke Moore of Scarborough, Ont., who plays as MooreMan, has slipped to third place, with $322,899 or a 224% gain after leading for much of the past week.
"I'm still sticking with the same strategy this week -- Freddie Mac/ Fannie Mae. We'll see if it pays off if the House passes this bailout bill tomorrow," Mr. Moore said.
He credited his success to a coworker, Rob V. (he didn't want his last name used) whom Mr. Moore described as an astute investor who is shocked at how well MooreMan is doing.
"In general, I'll probably keep the number of trades down over the period and stick with the financials," Mr. Moore said.
Berkley Barnard, a 38-year-old business analyst for a manufactur-ing company in Brandon, Man., who plays as Lesch, has slipped to seventh place, with $226,567, a 127% gain.
"With the volatility in the markets over the last while, there have been many waves to ride, and I have tried as best I can to identify them once they start, and get out before they finish," he said.
Mr. Barnard, who said he is new to the stock markets and approached the contest as a learning experience, said he's been following the news as closely as his time allows, and trading based on what he sees and reads.
"I have been primarily guided by gut feel on this, and my goal has been to avoid the trap of trying to squeak out every last penny on a given position."
Mr. Barnard said he held exchange-traded funds in hopes the bailout would pass today, but recent news is dampening his enthusiasm for this approach, "and I will continue to search for a few gems to help me stay competitive. Financials have provided some great opportunities for rapid improvement, but so far at least I have approached them as 'quick hits', trying to get in and out quickly as they have jumped around."
The week has not gone nearly so well for Harley Thwaites, a 16-year-old high school student in Vancouver, one of last week's leaders who had slipped to 14th place as of yesterday, with $201,242, up 101%. Although he is too young to qualify for any prizes, he is advising his older brother, who is registered in the contest and is eligible.
Mr. Thwaites bought Agrium Inc. (AGU/TSX) down 23% yesterday, and fertilizer maker CF Industries (CF/ NYSE), which suffered a 34.6% plunge yesterday.
"Hopefully, they will have a nice jump at one point soon."
Mr. Thwaites also holds Citigroup (C/NYSE) and some small miners listed on the Venture Exchange.
"I'm thinking about buying into the bigger companies, probably financial, again because they took most of the worst hits and they could be the ones to gain the most.
As for my own portfolio -- National Post employees, of course, are ineligible to win prizes -- I assembled a collection of geared exchange-traded funds that fluctuate twice as much as the underlying index.
But such a strategy requires you to check your portfolio constantly, and since I've been too busy to even log on this week, my performance suffered and I am in the middle of the pack.
The lesson learned in the contest applies in real life, as well: If you are too busy to watch your holdings constantly, stick with a few quality companies that you can forget about.
Published: Friday, October 03, 2008
Shell-shocked investors have been terrified by this week's market gyrations -- unless they've been using play money.
Leaders in the financialpost.com's Stock Market Challenge stock-picking contest have shrewdly managed their portfolios so that most of last week's top 10 players are still near the top of the leaderboard, with only a minor shifting of places.
"A number of them cashed out or limited their positions in light of the turmoil," said Rory Olson, CEO of Stock-Trak Group Inc., the company responsible for developing the software that powers the game.
"All of the leaders have been trading the financials, with traders riding each up/down wave with long and short positions," Mr. Olson said in an e-mail.
Contestants start with $100,000 in play money and can buy any stock or exchange-traded fund listed on the TSX, NYSE, Nasdaq or AMEX. The first prize of $25,000 goes to the best trader (more than 25 trades) and the best investor (fewer than 25 trades) when the contest ends in mid-January.
The leader, who has turned his $100,000 into an astounding $563,171 in just 14 trading days for a 463% gain, is risingstar, also known as Doug O'Brien, a 65-year-old retired insurance sales manager from St. Hyacinthe, Que.
Mr. O'Brien said he profited from the extreme volatility of the past week. "I'm back on top. It has never been this good."
Mr. O'Brien said he traded whatever was moving this week, keeping up-to-date by using the Financial Post.
"There are trading gems to be found every day. I picked up two today. Do not ask which ones," he said.
On U. S. markets, Mr. O'Brien said he briefly owned American International Group Inc. (AIG/NYSE), JPMorgan Chase&Co. (JPM/NYSE), Energy Conversion Devices Inc. (ENER/NASDAQ), Apple Inc. (AAPL/ NASDAQ) and Nike Inc. (NKE/NYSE).
On the TSX, he bought and sold Goldcorp Inc. (G/TSX), Agnico-Eagle Mines Ltd. (AEM/TSX), Questerre Energy Corp. (QEC/TSX),
Agrium Inc. (AGU/TSX),Research In Motion Ltd. (RIM/TSX) and Grande Cache Coal Corp. (GCE/TSX).
Mr. O'Brien said he increased his activity to an average of 65 trades per day, "making the most of it while the market rattles and rolls. Many small profits beat the hell out of big, bad losses. A profit is a profit. Sell, sell, sell is my motto."
Luke Moore of Scarborough, Ont., who plays as MooreMan, has slipped to third place, with $322,899 or a 224% gain after leading for much of the past week.
"I'm still sticking with the same strategy this week -- Freddie Mac/ Fannie Mae. We'll see if it pays off if the House passes this bailout bill tomorrow," Mr. Moore said.
He credited his success to a coworker, Rob V. (he didn't want his last name used) whom Mr. Moore described as an astute investor who is shocked at how well MooreMan is doing.
"In general, I'll probably keep the number of trades down over the period and stick with the financials," Mr. Moore said.
Berkley Barnard, a 38-year-old business analyst for a manufactur-ing company in Brandon, Man., who plays as Lesch, has slipped to seventh place, with $226,567, a 127% gain.
"With the volatility in the markets over the last while, there have been many waves to ride, and I have tried as best I can to identify them once they start, and get out before they finish," he said.
Mr. Barnard, who said he is new to the stock markets and approached the contest as a learning experience, said he's been following the news as closely as his time allows, and trading based on what he sees and reads.
"I have been primarily guided by gut feel on this, and my goal has been to avoid the trap of trying to squeak out every last penny on a given position."
Mr. Barnard said he held exchange-traded funds in hopes the bailout would pass today, but recent news is dampening his enthusiasm for this approach, "and I will continue to search for a few gems to help me stay competitive. Financials have provided some great opportunities for rapid improvement, but so far at least I have approached them as 'quick hits', trying to get in and out quickly as they have jumped around."
The week has not gone nearly so well for Harley Thwaites, a 16-year-old high school student in Vancouver, one of last week's leaders who had slipped to 14th place as of yesterday, with $201,242, up 101%. Although he is too young to qualify for any prizes, he is advising his older brother, who is registered in the contest and is eligible.
Mr. Thwaites bought Agrium Inc. (AGU/TSX) down 23% yesterday, and fertilizer maker CF Industries (CF/ NYSE), which suffered a 34.6% plunge yesterday.
"Hopefully, they will have a nice jump at one point soon."
Mr. Thwaites also holds Citigroup (C/NYSE) and some small miners listed on the Venture Exchange.
"I'm thinking about buying into the bigger companies, probably financial, again because they took most of the worst hits and they could be the ones to gain the most.
As for my own portfolio -- National Post employees, of course, are ineligible to win prizes -- I assembled a collection of geared exchange-traded funds that fluctuate twice as much as the underlying index.
But such a strategy requires you to check your portfolio constantly, and since I've been too busy to even log on this week, my performance suffered and I am in the middle of the pack.
The lesson learned in the contest applies in real life, as well: If you are too busy to watch your holdings constantly, stick with a few quality companies that you can forget about.
Secrets to their success
Richard Morrison, Financial Post
Published: Thursday, September 25, 2008
It was a great week to start the financialpost.comStock Market Challenge stock-picking contest. With financial firms on Wall Street collapsing or being bailed out and markets plummeting, the earliest leaders were those who had sold U. S. financial giants short, but that soon changed to those who held shares in rebounding Wall Street companies.
The adoption rate for the first week of the contest has been beyond expectations, said Rory Olson, chief executive of Stock-Trak Group, the company responsible for developing the software that powers the game.
"Players have really shown off their market savvy and creativity," Mr. Olson said. "With thousands of registrants and more than 75,000 trades made, the contest is off to a tremendous start."
The financialpost.comStock Market Challenge is simple. Contestants, who must be Canadian residents, start with $100,000 in play money and can buy any stock or exchange-traded fund listed on the TSX, NYSE, Nasdaq or AMEX. The first prize of $25,000 goes to the best trader (more than 25 trades) and the best investor (fewer than 25 trades) when the contest ends in mid-January. Luke Moore, of Scarborough, Ont., playing as MooreMan, turned his original $100,000 in play money into $306,000 as of yesterday's close to lead the contest.
"I don't follow the markets too much, but a co-worker of mine is quite adept at it and has been helping me learn," Mr. Moore wrote in an e-mail, noting that he was "almost dead" in the competition a week ago.
Mr. Moore, together with "beatus" and "Strongbad" with $303,000 each, all rode yesterday's 43% surge in the shares of Freddie Mac(FRE/NYSE).
Risingstar, the leader Monday evening, had slipped to fourth place as of yesterday's close, but still turned his $100,000 in play money into $264,000 in eight trading days.
"I made about $25,000 today, so we're on our way there," said Doug O'Brien, the 65-year-old retired insurance sales manager from St. Hyacinthe, Que., who plays as risingstar.
"I've spent many hours doing this in the last couple of years. I practise it a lot, with real money," he said, adding he's done "very well," with his hobby.
Mr. O'Brien said volatile markets are a cause of worry for long-term investors but represent opportunity for frequent traders like himself. He holds a stock for an average of half an hour, or two days at the maximum.
When the markets turn down, "I just switch to the other side. If I was long, I go short."
Every weekday, Mr. O'Brien said, he reads the Financial Post at 7 a. m. to prepare for the day's trading activity. He then spends most of the day buying, selling and shorting stocks. On Monday, for example, at least 35 of his 40 or so trades were profitable.
"I call that 'massive action,' " Mr. O'Brien said, citing a phrase from Tony Robbins' book, Unlimited Power.
"If you're going to be good at something, you've got to do a lot of action," he said.
He then spends half an hour or so in the evening reviewing his daily trading activities.
"I don't like to go to bed with too many stocks," he said, referring to his practice of selling off most of his holdings before the end of the trading day because he has no way of knowing how markets will open.
"I'm leery of being loaded with stocks overnight and the market turns on me and then I'm stuck with a big loss and I'm trying to make it up, which I don't want to do."
Harley Thwaites, a 16-year-old high school student from Vancouver, was in seventh place with $236,000. Although he's too young to be eligible for a prize, he said he will be advising an older brother who is eligible and registered in the contest.
"I have a great passion for the stock market; I inquire into companies, which I believe will maximize my potential of finishing near the top; and, because I was able to buy into many companies, which were near bankruptcy and are now working their way back up the ladder," Mr. Thwaites wrote in an e-mail.
He bought shares of Washington Mutual Inc. (WM/NYSE) just before markets closed yesterday, after the stock plunged 29%.
"I'm hoping that tomorrow it will bounce back up for the loss and that is when I will sell."
As for my own portfolio-- National Post employees, of course, are ineligible to win prizes -- my strategy of investing in 10 small-cap companies with strong price momentum has blown up spectacularly, leaving me near the bottom of the contest. Next week, I will let you know how my plan for recovery -- buying geared exchange-traded funds that fluctuate twice as much as the underlying index --has turned out.
Published: Thursday, September 25, 2008
It was a great week to start the financialpost.comStock Market Challenge stock-picking contest. With financial firms on Wall Street collapsing or being bailed out and markets plummeting, the earliest leaders were those who had sold U. S. financial giants short, but that soon changed to those who held shares in rebounding Wall Street companies.
The adoption rate for the first week of the contest has been beyond expectations, said Rory Olson, chief executive of Stock-Trak Group, the company responsible for developing the software that powers the game.
"Players have really shown off their market savvy and creativity," Mr. Olson said. "With thousands of registrants and more than 75,000 trades made, the contest is off to a tremendous start."
The financialpost.comStock Market Challenge is simple. Contestants, who must be Canadian residents, start with $100,000 in play money and can buy any stock or exchange-traded fund listed on the TSX, NYSE, Nasdaq or AMEX. The first prize of $25,000 goes to the best trader (more than 25 trades) and the best investor (fewer than 25 trades) when the contest ends in mid-January. Luke Moore, of Scarborough, Ont., playing as MooreMan, turned his original $100,000 in play money into $306,000 as of yesterday's close to lead the contest.
"I don't follow the markets too much, but a co-worker of mine is quite adept at it and has been helping me learn," Mr. Moore wrote in an e-mail, noting that he was "almost dead" in the competition a week ago.
Mr. Moore, together with "beatus" and "Strongbad" with $303,000 each, all rode yesterday's 43% surge in the shares of Freddie Mac(FRE/NYSE).
Risingstar, the leader Monday evening, had slipped to fourth place as of yesterday's close, but still turned his $100,000 in play money into $264,000 in eight trading days.
"I made about $25,000 today, so we're on our way there," said Doug O'Brien, the 65-year-old retired insurance sales manager from St. Hyacinthe, Que., who plays as risingstar.
"I've spent many hours doing this in the last couple of years. I practise it a lot, with real money," he said, adding he's done "very well," with his hobby.
Mr. O'Brien said volatile markets are a cause of worry for long-term investors but represent opportunity for frequent traders like himself. He holds a stock for an average of half an hour, or two days at the maximum.
When the markets turn down, "I just switch to the other side. If I was long, I go short."
Every weekday, Mr. O'Brien said, he reads the Financial Post at 7 a. m. to prepare for the day's trading activity. He then spends most of the day buying, selling and shorting stocks. On Monday, for example, at least 35 of his 40 or so trades were profitable.
"I call that 'massive action,' " Mr. O'Brien said, citing a phrase from Tony Robbins' book, Unlimited Power.
"If you're going to be good at something, you've got to do a lot of action," he said.
He then spends half an hour or so in the evening reviewing his daily trading activities.
"I don't like to go to bed with too many stocks," he said, referring to his practice of selling off most of his holdings before the end of the trading day because he has no way of knowing how markets will open.
"I'm leery of being loaded with stocks overnight and the market turns on me and then I'm stuck with a big loss and I'm trying to make it up, which I don't want to do."
Harley Thwaites, a 16-year-old high school student from Vancouver, was in seventh place with $236,000. Although he's too young to be eligible for a prize, he said he will be advising an older brother who is eligible and registered in the contest.
"I have a great passion for the stock market; I inquire into companies, which I believe will maximize my potential of finishing near the top; and, because I was able to buy into many companies, which were near bankruptcy and are now working their way back up the ladder," Mr. Thwaites wrote in an e-mail.
He bought shares of Washington Mutual Inc. (WM/NYSE) just before markets closed yesterday, after the stock plunged 29%.
"I'm hoping that tomorrow it will bounce back up for the loss and that is when I will sell."
As for my own portfolio-- National Post employees, of course, are ineligible to win prizes -- my strategy of investing in 10 small-cap companies with strong price momentum has blown up spectacularly, leaving me near the bottom of the contest. Next week, I will let you know how my plan for recovery -- buying geared exchange-traded funds that fluctuate twice as much as the underlying index --has turned out.
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