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We Have A Winner!!!
The first annual TradingMarkets Stock Picking Contest is now officially over and we have our winners. But before I introduce you to them and share their investment techniques (each winner incredibly saw their portfolio rise over 100% last year!), I'll remind you of the rules we put in place. First, you had to come up with what you thought would be the five best stocks to "buy and hold" for 2003. We took the closing price of the five stocks from December 31, 2002 and finished with the closing prices of those stocks from 2003. Real simple, all you had to do is what the buy-and-hold crowd does, pick the stocks, don't use stops, and wait for the riches to come to you (and ignore the fact that bear markets occasionally make 30%-70% of your money disappear). The person whose portfolio did the best won a $1000 first place prize. And we added a second rule which was also very was simple...you had to be 5 years old or under to enter. Anyone 6 years old or up was not eligible for the contest.
Our 2003 Winners, Including "Thomas the Midget Doctor"
First, I'll tell you the contest was hotly contested. The average mutual fund manager in the United States saw their portfolio rise 23% in 2003. That's pretty good, especially considering that their average return for the previous three years was a negative number. And as impressive, last year's average mutual fund manager's return was only 5.86% "lower" than the combined portfolios of all our five-year-old-and-under contestants! The top kids put the average portfolio manager to shame.
Five of these kids saw their portfolios rise over 100% for the year. How did they do it? Let's meet them and learn how.
In third place was a gentleman who is a model of consistency. Now a first grader, Joseph Hetzer was in the top three spots each quarter this year. His return for 2003? 111.37%! Joseph focused on some great performing stocks including (NTE | Quote | Chart | News | PowerRating), (SBL | Quote | Chart | News | PowerRating) and (HAS | Quote | Chart | News | PowerRating). And, even more important than beating the average mutual fund manager by a nearly 5-1 mark, his mother wrote us that this year "Santa Claus brought him his main request--a unicorn that glows in the dark." Nice!
Finishing in second place (and also decimating the average mutual fund manager) is a new name to the leader board. Five-year old Thomas Griffins's name did not appear once amongst the leaders until year end when his portfolio soared, bringing it up 127.33% for the year! Because we had no previous information about Thomas, we asked his father to tell us about him and how he picks his stocks. His father left out the stock-picking part, but he did send us some information which may help us all become better stock pickers. His dad told us that not only is Thomas one heck of a portfolio manager, he also has "a keen eye for the opposite sex." This keen eye was further proved out at a neighbor's Christmas party the family recently attended. His dad wrote "Thomas, spotting some attractive teenage girls sitting on a couch, (and keep in mind he doesn't know any of them) drapes himself across their respective laps and announces he is 'Thomas the Midget Doctor'."
It's really too bad that Thomas didn't win the thousand dollars. We calculated that if he continues to achieve a 127.33% return for the next 20 years, he would have $13,587,358,637 by the age of 25. And if he continues to play the midget doctor game as an adult, he'll likely need every penny of it to fend off the multiple class action law suits brought on by Gloria Allred on behalf of her clients. Great job Thomas (only about stock picking, not the midget doctor stuff. I have a teenage daughter and no one is going to play doctor with her until she's at least 25 years year old and even then, they're going to have to get my permission).
Our Winner
Who's the best stock picker around? It was "Master Nick" himself, Nick Rodrigues from Virginia. How did Nick do? He was up an amazing 193.26%! Nick does not yet possess an MBA, PhD, CFP, CFA nor any other three-letter titles like the average mutual fund manager does. But, guess what? In June 2005 he will have a kindergarten degree. And if he's doing triple -digit returns without any schooling, imagine what he'll be doing when he enters first grade! Nick's dad also wrote us that Nick "got new Sponge Bob underwear from Grandma" and is looking forward to seeing the Patriots in the Super Bowl.
We have a lot in common, Nick. Even though my grandmother didn't send me Sponge Bob underwear for Christmas (she sent me $10 instead), I too am looking forward to seeing the Patriots in the Super Bowl (I'm writing this before Saturday night's game, so I hope we haven't jinxed them). And, if they make it to the Big Game on February 1, feel free to treat your dad and me to the game, because you are a brilliant stock picker. You have kicked the behinds of all those guys who go on TV, look serious, and tell everyone which stocks they feel are good buys. Yes, most of them sadly believe that the key to outperforming the averages by a nearly 8-1 margin as you did, is to first get an MBA and then become a CFA. But you "Mister Nick", through your performance, have proved them wrong. You have shown that to the key to achieving 193.26% is not having all those letters after your name. Nope, it's not. Why did you do 193.26% and all those supposedly really smart guys do 171% less than you? Well, let's come to this answer as a group. Let's say it's December 31, 2002 and I asked: Who is most likely to achieve triple-digit stock market returns in 2003?
a) The mutual fund manager with a Harvard MBA who goes on TV to proudly divulge his best stock picks to us.
b) The mutual fund manager with a Wharton MBA who goes on TV to proudly divulge his best stock picks to us.
c) The mutual fund manager with a Stanford MBA who goes on TV to proudly divulge his best stock picks to us.
d) A 4-year-old whose grandmother just gave him Sponge Bob Squarepants underwear for Christmas.
Voila! We have our answer. And because of his performance, 4-year-old Nick Rodrigues was not only amongst the top one tenth of one percent of all mutual fund managers in the country for his performance in 2003, he's also $1000 richer.
Congratulations to all our top performers and especially to Master Nick!
Finale
The contest was a great deal of fun, and it's now time to get back down to work. Next week, we'll again focus on the ways to to achieve success from the marketplace. I'll share with you some new market research that will hopefully put you in the same position over the next 12 months that Joseph, Thomas and Nick were in over the past 12 months.
Have a great week trading (and if you have a teenage daughter, keep an eye out for Thomas the Midget Doctor!).
Larry Connors
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