2019 Stock Picking Contest

Welcome to the 2019 Stock Picking Contest! You can check out the results from the 2018 Contest here.

Last year, I just had folks pick and hold 3 stocks. It was a hoot, but it ended up being a bit of work to maintain the spreadsheet and convert Canadian dividends to to US$ (thanks Nelson) and whatnot. Plus, 3 stocks don’t provide much diversification, and one of my secret objectives was to show that a portfolio selected at random (by my dog) could do quite well.

This year I wanted to find a stock picking contest that would allow more flexibility and improve my dog’s chances of winning. I found the site How the Market Works, and my tests of a few trial contests last year went fine. I don’t have any relationship with the contest site (if you’ve seen the site, you’ll note they like to receive, not give, affiliate payments) but I hope it works. If the site shuts down or malfunctions this year, we’ll revert to an arm-wrestling contest to decide our winner.

The rules are fairly straightforward. Everyone starts with US$100,000, and the contest runs from 1-Jan to 31-Dec. No penny stocks (minimum of $3 / share – sorry Coco). Cash earns 3%. 25% limit for any one position. Almost unlimited trades. I turned on the ability to short stocks to increase the potential mayhem (you’re welcome, Mr. Bezek). I also added the Toronto exchange to keep Nelson happy.

Entries are now closed, so let’s meet our contestants and see the current ranks. I won’t go into detail on everyone’s positions today, but we’ll start to peek at a few.

MoneyMaaster

Jordan Maas blogs at Money Maaster (which recently won the coveted “Most Millennial Sounding Name” award). After 2 weeks of play and 3 or so days atop the leaderboard, Jordan is feeling confident enough to talk smack to both Nelson and Bamble the dog. Bamble responded, “There are actually 52 weeks in a year. Brah.”

Jordan has provided some details and insight on his picks here – a trend which I highly encourage.

Super Little Paul

Let’s see how the 8 y.o. picked the stocks that are beating most of the field:

• Amazon (AMZN) – of course
• Southwest Airlines (LUV) – “the best airline”
• Microsoft (MSFT) – “I’ve heard of them” and #1 market cap
• Netflix (NFLX) – one of his top entertainment providers
• Nestlé (NSRGY) – he likes DiGiorno pizza
• Target (TGT) – the best place to buy Legos

Little Paul

My eldest wanted in on the fun this year after seeing his younger brother beat up on the adults (including dad). These picks are not surprising for an 11 y.o.:

• Activision (ATVI)
• Nintendo (NTDOY)
• Papa John’s (PZZA)
• Tencent Holdings Limited – owns publisher Epic of Fortnite fame (TCEHY)
• Walmart (WMT)

A secondary goal of this contest is to teach my boys a bit about investing. I tried to tell them that DiGiorno and Epic aren’t going to move the needle much for Nestlé and Tencent. But they countered that everyone in the world should starting eating DiGiorno and playing Fortnite, which I had to concede would be material events.

Bamble

Bamble is a Pembroke Welsh Corgi, originally from Broken Arrow, Oklahoma. He now resides in Texas, where he likes sleeping. Bamble’s picks were generated by randomly selecting 10 companies from all NYSE and NASDAQ listings – I produced two lists, and gave him the final choice. He is going to represent the “monkey throwing darts” portfolio since ABL can’t afford a monkey. I’ll just list his interesting picks to see how many you recognize (I knew two…):

• Houston Wire & Cable Company (HWCC)
• Mesa Laboratories, Inc. (MLAB)
• Pembina Pipeline Corporation (PBA)
• Kirby Corporation (KEX)
• American Electric Power Company, Inc. (AEP)
• RYB Education, Inc. (RYB)
• PerkinElmer, Inc. (PKI)
• Chuy\’s Holdings, Inc. (CHUY)
• Patriot Transportation Holding, Inc. (PATI)
• Psychemedics Corporation (PMD)

Bamble will sit on his holdings all year unless an event gives him more liquidity.

Financial Uproar

Nelson writes at Financial Uproar and Canadian Dividend Investing. Pay attention to Nelson, because the gloves are off and his ability to find obscure value plays may even exceed that of Bamble.

jaycsmit

Mr. Smith is an indexer in real life, so of course it makes sense that he was our 2018 champion. He seems to think buying one stock (COP) and leaving 75% in cash is going to win this year. Good luck sir.

tawcan

When Bob from Tawcan agreed to join this year’s contest, the average investing savvy of the group shot up. Bob is yet another person I’ve tricked into joining so I can piggyback on his investing ideas.

Paul-ABL

That’s me. More on my picks below.

OdysseyToFire

Odysseus – if that is his real name – blogs at Odyssey To Fire. Will my sons be his Scylla and Charybdis? Will he listen to the Siren song of shorting and get burned? That’s all of the Odyssey I can remember. Oh and there was a dog named Argos.

Matthew – All About The Dividends

Some time this year, we’ll let Matthew, who blogs at All About The Dividends, and DGI have a competition to prove who loves dividends more.

Mister_PK – PK writes at Don’t Quit Your Day Job

mrtako – Mr. Tako writes at Mr. Tako Escapes

DividendGrowthInvestor – DGI writes at Dividend Growth Investor.

I suspect that PK, Mr. Tako, and DGI are three of the most experienced investors in this whole shooting match. However, none of them have made a pick yet – they all sit 100% in cash. Why, you ask? To put it in Dungeons & Dragons terms, I believe they have the Intelligence to know that almost all big gains are concentrated in just a few trading days each year, but they lack the Wisdom to do anything about it.

ErikMastermindWithin

Erik, who writes at The Mastermind Within, passed on the contest last year because he couldn’t come up with three stocks, and now he’s already shorting Apple. I like the way this is trending.

coco jam

Coco blogs at Coco Jam Travels. I see mention of neither travel nor jam on her site, so additional diligence is required. Coco wanted to trade crypto and penny stocks, so her finishing middle of the pack seems a bit unlikely.

WanderingSteve

Reader Steve has a really fun year of wandering planned (I may ask him for a guest post to tell us about it), but he said it wouldn’t be complete without joining the ABL Stock Picking Contest. We’re happy to be the icing on your cake, Steve!

FI Garage

The folks at FI Garage have been blogging for about 10 minutes, but they claim to have the investing chops to win this contest. Time will tell.

Ian Bezek

Ian is the only person who has truly embraced the potential of this contest. He’s already been shorting stuff like a madman. He’s also bringing up the rear. Ian is the current favorite to provide the most entertainment in the contest.

My Strategy

I’m not feeling terribly bullish about the market, so I’m going to start the contest playing some defense. I’m going with some long / short combinations based on whims and about 30 seconds of diligence. I’m long Home Depot (HD) and short Lowe’s (LOW). Long HUYA (HUYA – Chinese streaming) and short Netflix (NFLX). Long Target (TGT) and short Walmart (WMT). And then I’ll be opportunistic – like when I added Apple (AAPL) after its drop. I am getting some grief from my kids who are taking it personally that I’m shorting their longs…

I do own HUYA and WMT. (When you’re long a stock and then short it in a stock picking contest, does that even require disclosure? And why, exactly, would I do that? Both excellent questions.)

Let the Mayhem Begin

There’ll be too much trading – and too many weird companies uncovered by Nelson – for me to provide blow-by-blow updates or comprehensive analysis, but I’ll figure out a way to provide some interesting interim reports. Folks in the contest should be able to see everyone’s portfolio and trades, so please enjoy as the trading intensifies and performances start to diverge.

Good luck to everyone, and thanks for playing!