How did I come first in South Australia in the ASX share market game?
I know you are all wondering how I came to be in first position so without any further ado I will tell you. It was simply a matter of buying shares holding them until they increased in value and then reducing my holdings via pending orders. Due to rules of the game, the pool of shares I could choose from was only 100 companies and could not short sell. As I do with any problem I face I try to break it down into its component form.
Components involved
After initial brainstorming, I came up with some very broad components that would need to be implemented in my strategy. These components are interrelated below is a simplified view of the various components that need to be considered:
Given this information, the best strategy I could use would be to select stocks that were highly correlated and stay out of any stocks that had exposure to the subprime. I did choose one banking sector stock as it had a quality loan book and no US market assets. My portfolio was heavily weighted to the resource sector with exposure to Gold, Zinc, Copper, Aluminium, Bauxite, Uranium and AUD/USD spot prices. Below is a chart showing my performance throughout the trading period. You can also see where I scaled back my resource market holdings.
As you can see in the final two weeks if I did not alter my strategy, my portfolio would be worth $3000 less and I would not have been in first place.
Game Statistics
National Performance summary
| My Portfolio value | $63,050.30 |
| Number of ranked Players | 15541 |
| My Ranking | 13 |
| Average Player Portfolio Value | $52,127.44 |
| Percent of players in profit | 75.54% |
Conclusion
Although it was very humbling that I came first in the state and 13th in the country, the strategy that I used was highly risky and in the real world, I would not undertake such risk. In addition, I am reminded of a Ron Chernow quote:
“As a bull market continues, almost anything you buy goes up. It makes you feel that investing in stocks is a very easy and safe and that you’re a financial genius.”
At the end of the day winning the state division doesn’t mean a hell of a lot, my bank account is $1000 dollars better off, I don’t suddenly now consider myself to be an expert trader. I will continue myself education process and I believe entering these simulated trading games has helped my understanding of the markets.
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