ASX trading game - is it just luck?

[onemind]

Hi,

I am planning on playing the ASX sharemarket game when it starts after the current one and have a couple of questions about it.

There are 100 stocks in the game that you are allowed to trade using a hypothetical $50000 and you are forced to diversify by having no more than 25% of your capital in one stock.

According to the games data, the top 4 stocks for the period are:

Stock...Day 1...Now.....Change since start
OXR.....192.5...374.....94.29%
ZFX.....745.....1277....71.41%
LHG.....212.....360.....69.81%
SGM.....1486....2010....35.26%

I calculated that if you bought these 4 shares at the start of the game with 25% of $50000 each, today you would have, minus $150 brokerage - $83696

The current winner "Optimum Portfolio" has $83,752.26 today so it is obvious that he picked these 4 stocks at the start of the game and has done nothing since. Its the same with the other leaders.

2. no_idea QLD $83,116.01
3. ian dickason VIC $82,256.35
4. milkbottle NSW $82,235.45
5. The Astute Investor NSW $82,002.92

I figured that out of the 20000 players in this game, it is likely that 4 or 5 of them would pick these 4 stocks at the start so that the winners just got lucky and there is no skill to trading this game. Out of the 100 stocks that are used, only 12 of them have went down in price so any players with less than $50000 are just unlucky.

Do you think the winners of this game chose these 4 stocks by luck or was there analysis involved? Surely you couldn't pick all 4 out of 100 by anything other than blind luck so my odds of winning the next game are 4 out of 100 just like the 20000 other players.

Thanks for any thoughts on this.

 

[tech/a]

Do you think the winners of this game chose these 4 stocks by luck or was there analysis involved? Surely you couldn't pick all 4 out of 100 by anything other than blind luck so my odds of winning the next game are 4 out of 100 just like the 20000 other players.

Could be----could also be a fundamental resourse scholar who genuinely believed these to be the out performers.

Many could have picked them but obviously few have had the nerve to hold, and hold, and hold them.
many would attempt to maximise buy buying and selling possibly the same stocks,in times of less than a raging bull market particularly in a narrow field, resourses, there is more to out performance than buy and hold!

One thing is for sure without all or at least some of these performance will be well off top level.

 

[nizar]

the game is not about luck

just like in real-life, it requires careful stock-selection and the decision is still there to make - whether to hold or to sell at the tops and get in cheaper

i hold 3 of those 4 stocks in the game, and 2 in real-life, and i have studied them carefully

maybe you are just saying that because it wasnt u that put on those gains?

give credit where credit is due - hes number 1 from 20,000, thats a good effort in my books

 

[onemind]

Its not that, its just that the top 5 players have pretty much the same ammount as they would from buying and holding the top 4 stocks and out of the 20000 players, alot of which have all the tech trading software, years of education and experience and live data feeds, not 1 of them has beaten the pot luck top 4 pick.

Fair enough out of the people that play this game most are teenagers or beginners but there surely has to be at least one tech trader out there and they haven't beaten luck.

It would be interesting to see what the maximum ammount you could make out of these 100 stocks over the time period would be. Any programmers out there want t run a simple algorithm on these stock by any chance?

 

[michael_selway]

the game is not about luck

just like in real-life, it requires careful stock-selection and the decision is still there to make - whether to hold or to sell at the tops and get in cheaper

i hold 3 of those 4 stocks in the game, and 2 in real-life, and i have studied them carefully

maybe you are just saying that because it wasnt u that put on those gains?

give credit where credit is due - hes number 1 from 20,000, thats a good effort in my books

Your current portfolio (live)
Portfolio total $72,750.10

National performance (at close 11/05)
National leader $83,752.26
National average $56,028.04
Your ranking (at close 11/05)
National ranking 134 of 16402
State ranking 37 of 6141

 

[nizar]

Your current portfolio (live)
Portfolio total $72,750.10

National performance (at close 11/05)
National leader $83,752.26
National average $56,028.04
Your ranking (at close 11/05)
National ranking 134 of 16402
State ranking 37 of 6141

Top50 in state nice, only a matter of time b4 i catch u though

Your current portfolio (live)
Portfolio total $72,054.00

National performance (at close 11/05)
National leader $83,752.26
National average $56,028.04
Your ranking (at close 11/05)
National ranking 174 of 16402
State ranking 55 of 3908

 

[onemind]

Does it suck getting beaten by a bunch of newbies that got lucky?

Just kidding

 

[wayneL]

Analysis helps, no doubt about that. But never underestimate the role of luck in trading/investing.

1,000 with $1,000 each people could walk into a casino, plonk their entire wad on red or balck, and the winners let it ride.

After a miserable 5 spins of the wheel, ~30 people would walk away with $32,000 each.

...just to put things into statistical context. :

 

[clowboy]

Onemind,

Bear in mind that there may be many "profesional" investors/traders in the game that are not doing as well as the ones that "got lucky" but the question should be who can repeat the results time after time? the trader/investor or the one that got lucky? I would rather be sitting on 1000th place, knowing I could repeat the result game after game than in First place knowing that I got "lucky".


Food for thought.

 

[onemind]

True

I just thought that with all the websites, books, tapes, programs and seminars on tech trading there would be at least one person in this game that could out perform the old buy and hold strategy.

 

[Porper]

Analysis helps, no doubt about that. But never underestimate the role of luck in trading/investing.

1,000 with $1,000 each people could walk into a casino, plonk their entire wad on red or balck, and the winners let it ride.

After a miserable 5 spins of the wheel, ~30 people would walk away with $32,000 each.

...just to put things into statistical context. :

I have read your paper on the casino scenario, very good and it does make it clear that luck has a role to play.

I have learnt that whether lucky or not, it is how you deal and react with this luck (or lack of) that counts.This is the difference between a long term profitable trader and a fly by night wizkid who can treble their money in the first year, then lose everything when their luck changes.

 

[nizar]

Porper and clowboy

could agree more with your comments



(onemind i hope u r listening)

 

[3 veiws of a secret]

The person to ask ,is that geezer that thinks he is born in New Zealand ,but everybody in Australia thinks he is an Ozzie actor that owns the Rabbitohs(schpelling!)
Now surely the character to analyse is that mathmagician he portrayed in his film . Damn forgot his name, geeee enough humour banter time to watch the FA cup! now what luck have West Ham got! Sweet FA!

 

[tech/a]

True

I just thought that with all the websites, books, tapes, programs and seminars on tech trading there would be at least one person in this game that could out perform the old buy and hold strategy.

Letting profits run and cutting losses is the catch cry of tech traders.
When over the last 3 mths these 4 stocks have basically traded vertical,the best result possible technical or otherwise is buy and hold.

It is possible that these stocks were chosen technically,buy any of the leaders and their method of trading is technical,its also possible they are fundamentally chosen,do you have to state how you pick your selections?

 

[onemind]

(onemind i hope u r listening)

Are you for real Nizar? This was my whole point all along, lol

You're the one said that its not about luck.

I hope your listening

 

[lesm]

....... do you have to state how you pick your selections?

tech/a,

There is no requirement to disclose how selections were made.

.... alot of which have all the tech trading software, years of education and experience and live data feeds, not 1 of them has beaten the pot luck top 4 pick.

onemind,

With all due respect it is a long call to imply that the leaders have all made their selections based one pot luck. For all you know one or all of them may be tech traders, fundamentalists or discretionary traders, or there again they may have used the dart throwing technique. Just joking on the last point.


There are probably as many variations on stock selection in the game as there are in the real market.

The experienced tech traders in the game will be following their systems and their methodology. The game is one mechanism for trying out strategies. It may not always be about winning, as the traders are in the market for the long term not just three or four months.

 

[onemind]

All i'm saying is, if i pick 100 stocks at random then get 20000 people to pick the 4 that they think will do well in 4 months, out of the 20000, 4 or 5 of them is bound to pick the right ones.

Add analysis to the 100 stocks and you are bound to pick 1 or 2 of them but all 4?

True, trading has nothing to do with making the maximum profits but just a profit.

I'm not trying to invalidate tech analysis in short term trading just questioning its value in this "game". I have no doubt that good tech traders manage their losses correctly and choose decent stocks and come out the other end with a profit but there is no way in the world you can choose the best 4 every time as no one can see the future and these games are pretty pointless beyond teaching beginners the mechanics of trading.

19000 beginners have as much chance as winning this game as the 1000 pros and winning this game would be just like winning the lotto

Agree, disagree - who really knows

 

[nizar]

Add analysis to the 100 stocks and you are bound to pick 1 or 2 of them but all 4?

bro we are in the middle of a massive bull run fueled by resource boom

seriously its not that hard and its not very out of this world for somebody to pick OXR, ZFX and LHG. OXR is unhedged, LHG massive gold play and ZFX generating so much CASH from unhedged low cost, unhedged zinc production from century

for what its worth, i picked LHG, ZFX and OXR for the game and in REAL LIFE i hold OXR and LHG - and no, i didnt pick them out of a hat. Im probably not the only one who invested in the game what they hold in real life. The no1 in the game probably does too and hes probably making heaps of real cash outside the game.

if it was a stock that doubled out of nowhere due to a massive suprise takeover bid and u picked it and put $10Gs into it then yeh call it a fluke

heaps of people on here probably own OXR, LHG and ZFX... quality companies man...

 

[onemind]

Cool

Sounds like you know your stuff.

What this is about really for me is that i was in a big debate with techies who reckon that fundamentals dont matter in their trading and they could trade any market just by charts alone and make a profit. I then asked them if they could do this to win the asx game and they think they can.

Could you pick those three stocks without knowing about the resource boom and other underlying fundamentals of these companies?

True, pure chartists do skim profits each week but in this game, without fundamental knowledge it really is quite impossible to predict the future of these stocks by charts alone.

I guess i should have been more clear with my questions but managed to learn something either way

 

[shaneric]

Your current portfolio (live)
Portfolio total $80,544.40

National performance (at close 11/05)
National leader $83,752.26

National average $56,028.04
Your ranking (at close 11/05)

National ranking 18 of 16402
State ranking 9 of 6141

I have been up there for most of the game and I can tell you that I haven't had all of those 4 stocks for the whole game. Sure, some of them for quite some time but I traded alot at the start.

I still consider myself very new to stock trading, so I do think that some of my success is a little bit of luck... but I did pick the stocks that made money based on what I thought would go up... so take that as luck or skill.