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."