Tuesday, October 04, 2005

Test Trading

I remember a while back a posting on what will you do with $2000. And I think a couple of people mentioned investing. What will you do with $100,000?
Which lead me to this post, I do tivo Jim Cramer's mad money, although I usually end up seeing one or two episodes per week. Anyways, there is this new competition that let you match your wits with other traders with play money at - http://www.madmoneychallenge.com

Here is my proposition - if you are interested, why don't you register
More importantly why don't you post your rationale for your trades here on this blog.

I think this would be fun, just to 1) Improve knowledge of investing and trading 2) Learn about your investment style and personality 3) Risk taker or risk averse etc. and 4) just fun.

Games start Oct 6th. Happy Trading


t said...

Hi: I decided to try the madmoney thing, surprising myself. It's a very cool idea. The site must have software issues or something, since it's not responding to my "buy" attempts.
The story of how my process went:
I just watched part of Martha Stewart's "the Apprentice" last night, so I thought Martha Stewart Living Omnimedia stock would be nice.
The holidays are approaching, so I thought more good news for MSO, and also for Lego's Tyco. But I read news of Tyco's recent corporate scandal and scrapped that idea.
INTC was on mind because I used to be sponsored by a gift of Intel's Gordon Moore to Caltech until five days ago, and because there has been so little talk about processors and computers that I think the company is likely to get more notice, not less, in future. Then again, they're trying their hands at entertainment and networking and crap like that - popular and important, but with their staid culture, can they compete with the software folk?
I considered DaimlerChrysler because of my belief that Americans would rather buy American cars than equivalent (similar price, similar reputation) than foreign ones. I'm not in love with their current line-up of SUVs - too modern and rounded and big, plus, they have a hybrid that they seemingly haven't bothered to advertise; but I love and believe in their old Jeep Cherokees (such as mine, which isn't sold yet.) Anyway, i thought DCX was already over-valued, with close to the highest prices for the year.
I also considered Mary Kay, Harpo, and Dior. Mary Kay because of their new ad campaign and because I actually am using their product and suspect it's a good value. I wasn't really into Harpo: Oprah's business is great, but I don't see any big changes on the horizon that'll raise her companies' value. Anyway, these two appear to be privately held, so I couldn't find any stock info.
Christian Dior is a classic brand. I love. And I just heard last night that Dior signed up Sharon Stone to do their ads. She's waaaaay older than I am, but I guess old women have money, so it could be a nice move. If she photographs well (and I have advice for her: on Oprah months ago after her operation, she looked fabulous - she had a zen, calm, relaxed, at peace beauty - I would pay for that. Last night on TV, she looked like an American, trying too hard, stressed and tired. I don't know that many women who would be attracted to that.) As I was saying, if she photographs well, it could be good for Dior. Dior is listed on the Paris, not US, stock exchange, so it doesn't count. Just trying to spread some celebrity gossip :)
Anyway: what I would have done with my hundred thousand dollars if the site worked: about 2500 shares of MSO, about 1500 shares of INTC, and maybe some 300-or-so shares of DCX.
As you know, it's not real money, we're just playing around here.
thanks for suggesting this Busayo. I assume you're playing?

t said...

Oops, I meant Shola, not Busayo.

Busayo Michael Oluwagbemi said...

yeah this test trading thing is a cool idea..but i actually have been virtually investing with another site called marketocracy.com u can set up ur own mutual fund, up to 10 and ur performance will be tracked..if u are among the top 10% they will contact u to manage a real life fund..this year I am beating the S&P 8% but I am not even near the top 25% ..looks like they have some professional hands there..check it out..very cool

geon said...

doesn't seem to be working... the problem with this contest is that it's only for a couple months, so your best chance of winning is to invest the whole amount in one company which might go up a lot - a balanced portfolio would never win.

Busayo Michael Oluwagbemi said...

Umn..that might be a good idea if the market place is on the upside..I will advice u to short all ur money instead..if u can..October is historically a crummy month..we already saw that last week..oh that hurts!

geon said...

I'd say the risk of selling short isn't worth it unless you have very good grounds to believe that something will crash soon. it's unlikely we'll have a market crash this year. in any case, they don't seem to be allowing short selling in this contest.

good luck with selling your jeep Tosin...

Anonymous said...

Well, I am having software issues as well. I placed my trade before the game started, but looking today. The trades were not placed.
In addition, I don't think the rules allows you short sell. So this is not really the place for the sophisticated trader

t said...

Update, almost two weeks later:
The leading trader has doubled the 100,000. Ten traders have earned 40% or more. I have lost 5%.

t said...

It's been well over a month now. I'm rebounding from the initial losses. DaimlerChrysler is losing, as expected. The other two (Martha Stewart and Intel), are gaining.
Maybe someday I'll change the "portfolio," maybe not. I have a total of 99 grand and a bit. I expect further gains, the challenge continues till December 20th.

t said...

Hmm, actually, Intel is the only net increasing stock I have. Both Martha Stewart and DaimlerChrysler have lost about ten percent net since early October. Intel has gained maybe 15%.

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