Recommendations of strategies for ASX game

[Prospector]

Well, my son who is doing Year 12 is participating in the ASX share game. It spans over a couple of months, and while he is way more knowlegable than most kids of his age, how do fellow ASF'ers feel he should tackle the competition - ie it is dividend time, should he go that route, try some of the miners etc etc. He thinks the outcome is not based on the $$ return, but more about how he goes about it.

For some reason, his class is starting later (ie the game has already started - and this teacher is teaching a Year 12 Finance subject ) so he is already behind the eight-ball because he wanted to buy into PDN while it was low

Welcoming everyone's (not needing recommendations but more strategies as such, given it is only a 3 months time span!)

 

[deftfear]

Winners of the past asx share games usually have a stock that close to doubles over the period and a few others that do ok. Shares that have done this in the past are PDN, LHG and ERA (I'm sure there are others but I don't recall them) Most winners tend to make around 40% profit, so going for dividends isn't going to get you that 40% gain.

If you want to win you have to take big risks, 40% over 3 months is over 150% for the year, you can only make that kind of gain if you are taking some risks. You can't treat it like it's your own money if you want to do well, but as a learning experience pretending that it is your own money may give your son a greater benefit.

Most winners have been from the resource sector, although a few people have done well of the consumer area, CML, DJS and HVN have all done ok recently.

 

[Halba]

Pretty hard to double on ASX 200 shares....

 

[deftfear]

It is hard, but that's how most people have won. Previously it has just been the asx 100 making it even harder to find a stock that will double. This is the first time that I have seen 200 shares to choose from.

 

[Prospector]

I agree that in a 3 month time frame, then risks will need to be taken. On the other hand, they are 'marked' according to their strategy, which I am assuming, given the conservative nature of the teacher, means something entirely different. I guess he is trying to balance those 2 very different objectives.

 

[Buster]

Well, my son who is doing Year 12 is participating in the ASX share game. It spans over a couple of months, and while he is way more knowlegable than most kids of his age, how do fellow ASF'ers feel he should tackle the competition - ie it is dividend time, should he go that route, try some of the miners etc etc.

My young bloke is actually doing the same (Year 11). Obviously his teacher had his gear in one sock as the class was registered prior to start, however thay have only been able to log on the first day, the site has been down since..

I agree with Halba with the strats though, difficult to imagine an ASX 200 doubling in just a few months..

Regards,

Buster

 

[insider]

I think that your son will in if he is consistent... What I'd do it is simple... I'd buy a stock and then immediately after I'd place place an offer for it maybe 3 percent above for example and then repeat. 3 percent isn't that much and may vary but when it gets compounded over a while he'll probably double his money by the end. Of course he needs to know what he is buying, he'll need to buy at the right price... The reason for this strategy is that you need to recognize his limitations which would be not having internet access all the time whilst trading is happening. Just my thought... Secondly you should suggest to him some killer stocks and what not... or maybe get him to sign up to forums and see the value of collective opinions just like ASF provides.

Hope it helps... Oh and maybe get him to post on our ASX sharemarket game thread to see his progress...

Cheers

 

[Prospector]

My young bloke is actually doing the same (Year 11). Obviously his teacher had his gear in one sock as the class was registered prior to start, however thay have only been able to log on the first day, the site has been down since..

Regards,

Buster

Ah, that explains a few things I guess. The teachers were supposed to have done a mass registration for all students as they only accept registrations from an .edu.au email address. One class knows all about the game, my son's class has heard nothing, so I hope the teacher has already registered them because it is now too late to do so. Needless to say he has gone off to school to check all this.

We have been in small business for over 10 years and obviously his first case study was our business. He did rather well! : The teacher, on the other hand, has always been a teacher. Seriously, how can they know how to run a business! But there you go! Son is always coming home with little snippets about things the teacher says which are just wrong. I told him that as his teacher is the one marking his work, then play the teacher's game as the teacher sees it and not to make too many crises for him! Should be an interesting Parent Teacher meeting this week though!

 

[Halba]

I reckon this game has no strategy at all. Past winners have all fluked it with a takeover offer/double/or merger acquisition.

I"s just pure luck this.

 

[insider]

It's not about winning it's about learning...

 

[doctorj]

The types of things that are likely to win a person this stock market game are not likely things that are likely to get them many marks in a yr 11/12 type assignment.

Which leaves three options - if they are to document what they would do in a real world situation (well, what are popularly considered good practice) such as diversification, dividend yielding stocks on good P/Es with good growth prospects etc etc and they say that this method is unlikely to win the competition, which is the goal, then document what they plan to do (resource stocks, takeover targets etc etc) and why that's likely to win the competition.

As long as they document what they buy/sell and how it fits in with their strategy and how it fits in (or not) with popular belief of whats good investing practice they'll ace it irrespective of their result.

The other two options are doing the right thing or taking a really bearish view of the market and just staying in cash or defensive stocks...

 

[noobs]

Great post Doctor J - I agree entirely

 

[Prospector]

Yes, that's a great help DrJ - as are everyone's
Thankyou - shall print this off and give it to him tonight.

When he was five, he was charging his older brother interest on money (pocket money) he loaned him - we figured back then he was in for a career in merchant banking - at 17 we havent changed our minds!