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."