One Stock, One Month, Three Prizes

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September 16, 2007 | Stocks | | Author Asif

The Background:

When fellow blogger Vitaliy Katsenelson wrote to me last year about his plans to release a book he had been writing for the better part of 2 years, I told him that I would be happy to read his book and review it before launch. In case you are not familiar with Vitaliy’s work, he is a contributing author for some of the biggest financial websites including The Motley Fool, TheStreet.com, MarketWatch.com and Minyanville.com while maintaining his own blog over at Vitaliy’s Contrarian Edge. He is also the Vice President/Portfolio Manager of Investment Management Associates and teaches a class on equity analysis and portfolio management at the University of Colorado at Denver.

Given current market conditions, Vitaliy’s book Active Value Investing: Making Money in Range-Bound Markets which discusses investing in range-bound or trendless markets could not have been released at a better time. I started putting together a detailed review of his book but Geoff Gannon of Gannon on Investing beat me to the punch with this outstanding review of Vitaliy’s book.

The Prize:

I talked to Vitaliy about contributing a signed copy of his book to subscriber number 2,000 of my investment newsletter after subscriber number 1,000 proved to be elusive and he said he could do one better and instead give me four personally autographed books in case I wanted to give three of them away in a contest.

The Contest:

For some time now, I have wanted to launch a stock picking contest but have held off because of the amount of work required to set something like that up on an independent website like SINLetter. Vitaliy’s offer motivated me to go ahead with that project and we have now set up a simple stock picking contest that would reward the top three stock pickers with a copy of Vitaliy’s book. The rules of the contest are extremely simple as all you have to do is pick one stock and if your stock happens to be one of the top three performers by the end of regular trading on November 16th, you win. You can join anytime between now and November 15th and in case you are already a SINLetter subscriber you do not even have to login to participate. We decided to make things interesting by allowing participants to pick either long or short positions.

Since this is a beta version of our stock picking contest we would appreciate your feedback so that we can make the next one more robust. If there is sufficient interest in this contest and if I can find the moolah for it, we will probably launch another contest over the next few weeks with a bling toy like the Apple iPhone (AAPL) or a Nintendo Wii (NTDOY.PK) as the main prize. You can check out how you are doing from the stock contest rankings page, which would be automatically updated just like our model portfolio.

The Rules:

The three primary rules are,

  1. Only stocks that trade above $1 at the time of selection and that are listed either on the NYSE, Nasdaq or the American Stock Exchange will be accepted (sorry no pink sheet or bulletin board stocks at this time).
  2. Regular dividend payments will not be taken into account both on the long side and the short side.
  3. The stock contest price would be the highest price of the day for long stocks and lowest price of the day for short stocks if you pick the stock during a trading session. If you pick a stock after hours or over a weekend, the next trading session will be used to determine the highest price of the day for long stocks and lowest price of the day for short stocks. While this puts contestants at a slight disadvantage, it also helps stop people from gaming the contest.

Don’t forget to read the full list of rules and happy stock picking.

Click here to enter the contest.

Click here to view current rankings.




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Comments

  1. JK
    October 17th, 2007

    Asif, this might sound stupid but is the contest based on actual dollars profited or is it the % gained? Hopefully, it is % gained but just checking.

  2. Asif
    October 17th, 2007

    Hi JK, it is based on % gained. It is good to see the response and the reasons people entered for picking a stock.

  3. Living Off Dividends
    October 17th, 2007

    If November the 15th is the last date for entry and 16th is the result, what performance do you consider for people who enter on the 15th?

  4. Asif
    October 17th, 2007

    I guess people who decide to enter on November 15th would have one day of performance. With the way stocks behave that single day may be enough for all you know. Even a one month contest is almost a coin toss and this would be more so for someone entering the day before the contest closes.

  5. Larry Baker
    October 22nd, 2007

    I just read your article on "In Search of a 6% Yield". What can you tell me about the Reit (AWP) paying almost 9 1/2%? Thanks

  6. Asif
    October 22nd, 2007

    Larry, the closed-end fund Alpine Global Premier Properties (AWP) certainly look very interesting with its nearly 10% yield and 11% discount to net asset value (NAV). I like the international diversification and management fees at 0.99% are reasonable. A couple of things that may be working against this fund at this time would be the fact that it has only been around for 6 months and as quoted on their website they allocate a part of their portfolio to

    "debt securities of domesticand foreign issuers which are principally engaged in the real estate industry or real estate financing or which control significant real estate assets".

    The carnage in the debt market and a low appetite for real estate might explain why this fund is down almost 25% over the last six months and currently sells at a discount.  

    This could become a great income play as well as the long side of a long/short strategy applied to closed-end funds.

  7. Larry
    October 25th, 2007

    Asif,

    Please explain to me how any company like GLS or PWE can keep paying a high dividend when the dividend is two to three times the earnings per share. Thanks

  8. Sriram
    October 25th, 2007

    Asif,

    Great Contest and Site !. I have a suggestion. Currently the contest winner(s) would be determined by who has a stock with max % gain. This could however mean that someone can enter on 17th and win on 18th. I think the contest should be based on who has been on the top 3 for max number of days. You could also add the condition that the stock must be +ve on 18th.

    Just a thought…

  9. Asif
    October 25th, 2007

    @ Larry: I have not explored the dividend payout of PWE in great detail but I did check out GLS and it appears that even with higher earnings this year, their dividend payout on just the common stock could end up being almost 50% more than they earn. I guess they just increase their debt to pay out dividends. Two recent examples of companies that borrowed heavily to pay large dividends are Dean Foods (DF) and Health Management Associates (HMA), which I discussed in this blog entry about special dividends

    @ Sriram: That is a great suggestion and a social networking/stock contest site called Jambaz that I blogged about in June sets up contests in a similar fashion by awarding points daily based on how your picks performed that day. However I wanted to keep things simple for this first contest and hence only used one stock pick for one month.

    Would expanding it to maybe 3 or 5 picks and running the contest for a quarter work better? I would still prefer to just use the top performers at the end of the contest as it is a little closer to the reality of the markets. Consider what happened to our portfolio stock Ambassadors Group (EPAX), which lost more than half its value this week despite posting higher earnings this quarter. The stock was hit hard because of a weak outlook for 2008 and investors in the stock who have been nothing but winners over the last five years took a sudden and unexpected hit.

  10. JK
    October 31st, 2007

    Asif, excellent call on MNC! Feels great to finally see $$ in green! Looking forward to your next newsletter this weekend.

  11. Asif
    October 31st, 2007

    Thanks JK. The price appreciation in Monaco Coach (MNC) over the last few weeks had left me perplexed.

    If I can finish writing the November investment newsletter tonight, you should hopefully get it first thing tomorrow.

  12. Alaaddin kandeel
    November 6th, 2007

    Dear Asif

    I was looking at the ranking of the contest you have and noticed that the first place is for a stock which value was not above 1 $ at the time of selection and it’s listed in pink sheet.. your contest first rule states that the stock should be above 1$ and no pink sheet…what will be done in such case ?

    Al

  13. Asif
    November 6th, 2007

    Al, when he picked that stock it was exactly at $1, otherwise the system would have blocked it from being entered. When the system determined the “stock contest price”, it had dropped below $1.

    However since it is a pink sheet stock, the entry will be disqualified. You might find it interesting that the entry was by a close friend and he told me that he actually meant to go long on the stock but instead selected “short stock” by mistake. If he had done what he originally intended to do, the entry would have instead been the biggest loser instead of the biggest winner.

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