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.