Stock Contest for class
 

The class is a money/banking/investment course. The teacher is having us do a stock contest where the winner (the person with the highest balance at the end of 8 weeks) gets 10 points added to their final grade, 2nd place gets 5 I believe. We must pick our initial securities on next Saturday with Friday's closing price. Rules:

- $50,000 portfolio, and all of it must be invested (none in cash)

- Must initially buy between 1 and 10 securities or ETFs traded on the NYSE/NASDAQ/ASE

- Must own at least $5,000 of each security/ETF.

- Every Saturday (and ONLY on Saturdays) we're allowed to buy or sell. There will be a $50 "commission" for each transaction. Can't do any trading mid-week.

- We ARE allowed to short.

There are only 6 people in my class but I figure the best chance of winning is picking 1 penny stock and hoping for the best, correct?

If anyone has any ideas of stocks that have a chance of going bust but also have a chance to do very well in a 2-month time frame it would be appreciated. I'll update my portfolio along with my classmates once per week.

Re: Stock Contest for class
 

Can you buy options?

Re: Stock Contest for class
 

Pretty sure we can not. I'm an investing noob but unless options fall under "securities or ETFs traded on the NYSE/NASDAQ/ASE" then I don't believe so. Trading options is basically multiplying what you would make or lose by a certain factor, correct?

I'll ask my professor just in case.

Re: Stock Contest for class
 

Not exactly here is a definition:
http://www.investopedia.com/terms/s/stockoption.asp

Also I would stay away from obvious stocks that your class might pick and go with stocks with a higher beta. Personally I would buy all the derivatives exchanges ICE, NYX, CME as they probably won't have these and these stocks are going to crush when they report earnings in late October with all the volatility the market has been having. But GL and sounds like a fun class.

Re: Stock Contest for class
 

Short CFC $50,000

Re: Stock Contest for class
 

Do they have a stock that tracks Iowa farmland? [img]/images/graemlins/grin.gif[/img]

Re: Stock Contest for class
 

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Personally I would buy all the derivatives exchanges ICE, NYX, CME as they probably won't have these and these stocks are going to crush when they report earnings in late October with all the volatility the market has been having. But GL and sounds like a fun class.

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The contest is over on October 19th. When exactly is "late October"? The class does seem like it will be interesting, although my professor is one of those people who think that poker is gambling and that the house will eventually win all the players money. I didn't feel like getting into a discussion with him about it.

Re: Stock Contest for class
 

You could also play the double index etfs or the inverse double etfs for some leverage. http://www.proshares.com/funds

SteveOMS

Re: Stock Contest for class
 

I wouldn't buy a penny stock. Those only move when someone is juicing them. Unless you find one that starts on Friday, it will be too late before you can buy it.

You can tell your teacher that at least one guy on teh intarweb thinks the contest is stupid. Results are expected in 8 weeks, therefore by definition it is short-term. Yet you can only transact on a weekly basis. That's stupid.

Re: Stock Contest for class
 

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There are only 6 people in my class but I figure the best chance of winning is picking 1 penny stock and hoping for the best, correct?

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Why in the world would you think that's a good strategy?

Re: Stock Contest for class
 

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There are only 6 people in my class but I figure the best chance of winning is picking 1 penny stock and hoping for the best, correct?

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Why in the world would you think that's a good strategy?

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Well, I figure if I pick normal stocks like everyone else, I would figure I have a 1 in 6 chance of winning.

I figure if I pick a very volatile stock, then I might have a 1 in 2 chance of winning.

Am I wrong to think this way?

Re: Stock Contest for class
 

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Well, I figure if I pick normal stocks like everyone else, I would figure I have a 1 in 6 chance of winning.

I figure if I pick a very volatile stock, then the stock might have a 1 in 2 chance of going up.

Am I wrong to think this way?

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Re: Stock Contest for class
 

Can you invest the cash you get from shorting?

If so, short a lot and buy a lot and see what happens.

Don't buy indexes or anything lame. You're looking for variance here, not long run returns.

Re: Stock Contest for class
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]

There are only 6 people in my class but I figure the best chance of winning is picking 1 penny stock and hoping for the best, correct?

[/ QUOTE ]

Why in the world would you think that's a good strategy?

[/ QUOTE ]

Well, I figure if I pick normal stocks like everyone else, I would figure I have a 1 in 6 chance of winning.

I figure if I pick a very volatile stock, then I might have a 1 in 2 chance of winning.

Am I wrong to think this way?

[/ QUOTE ]

Are you in college or high school?

Re: Stock Contest for class
 

Ahhhhhhhh! I need a stock before tomorrow!

Re: Stock Contest for class
 

GE

Re: Stock Contest for class
 

Short AAPL.

Re: Stock Contest for class
 

My internet went down last night so I picked up 1,584.71 shares of Cisco @ $31.52/share. Will update with everyone's picks later this week.

Re: Stock Contest for class
 

Buy Grimstarr-Symbol GRM....100% guarantee no risk

Re: Stock Contest for class
 

I've been looking at a stock TGIC, Triad Guaranty. Mortgage insurer that is way down from its 52 week high, (private mortgage insurance company). Looks as if its market capitalization is close to its investment bonds and cash - liabilities. I may be missing something here but it looks like a good buy. If I'm way off base here, I'd like to see how.

Re: Stock Contest for class
 

Buy WCI, put an order in for TOL at $20.

Re: Stock Contest for class
 

[ QUOTE ]
I've been looking at a stock TGIC, Triad Guaranty. Mortgage insurer that is way down from its 52 week high, (private mortgage insurance company). Looks as if its market capitalization is close to its investment bonds and cash - liabilities. I may be missing something here but it looks like a good buy. If I'm way off base here, I'd like to see how.

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Mortgage insurance?? You have been watching the news, right? Mortgage companies blowing up left and right? Better check their exposure.

Nightmare scenario: An alt-a or subprime borrower gets a 100% mortgage for 400 grand. They've paid it down to $399,000 but now the payments adjust 33% higher and defaults. The house drops 25% in value and nobody is buying at that price. The mortgage insurer is on the hook for 80 grand.

The find-a-bridge-to-jump-off-of scenario: Some mortgage insurers also did securitizations of mortgage-backed packages of securities. Now it turns out some of those packages were made up of real garbage. So bad that nobody was buying when they were offered for 40 cents on the dollar. Some of the packages are huge (billions of dollars). Make sure they have little or no exposure to that.