StockStar Game: Strategy

September 23rd, 2008 by Potato

So the Financial Post StockStar game is on, and it’s kind of fun to make all the trades that come into my head but which I would be afraid to try in real life, or even just don’t have the money to carry out. You can play with $100k of fantasy money (up to $200k including fantasy leverage) to invest in the shadow stock market between now and January — best return wins. If you’d like to play, let me know and I can send you an invite through the game. It can be a good way to get some practice and education in how trading works, and to get used to looking at the rollercoaster ride your portfolio value will take.

Right now I’ve built up a portfolio that’s concentrated heavily in financials and energy, hoping — like I’m sure many players are — for a rebound that will take me to the top of the charts. I’m “only” leveraged about 40%, which in a game like this might hurt my chances. I’m also at a crossroads: the game is divided into two classes of players. Investors, who make 25 trades or less, and traders, who make more than that. I’ve just made my 25th trade. I’m pretty happy with my portfolio, and now have to decide if I want to face off against the active traders or the other buy-and-hold investors. Since it’s only the first week and I’ve already racked up those trades it’s very likely I’m going to end up as a trader: one more puts me over the edge. However, my gut instinct tells me that the “good” players will end up being traders, and I might have better odds in the game by just switching off now and competing against the <25 trades investors, even if it means I can’t use the rest of my margin between now and the end of the game. At the moment, just from pure odds being a trader looks better: there are 4000-some investors to 400-some traders. However, as the trades rack up through the months I anticipate most players will end up as traders.

The top guys are just making a killing: 80+% return in 4 days. I’m at about +3.5% [Update: I ended up sitting on this post for a few days; I’m now up 6%, after being up 14% last week. The top player is up over 138%]. One thing I noticed this week is that the trades now seem to be delayed 15 minutes. I think it’s because the quotes are 15 minutes delayed, and it appeared possible to use a service with real-time quotes to make “psychic” trades in the game. This happened once to my advantage last week, when I saw a stock was going up and went in to buy, and actually got it for cheaper than my real-time quote was giving me; this week that doesn’t appear to be happening any more.

Comments are closed.