Monday, March 12, 2007

A Million Dollar Chance

There has been a lot of buzz about CNBC's Million Dollar Portfolio Challenge, which started last week. I usually place an entry in these contests, but they are more about luck than anything. If you are interested in winning, you need to create as much risk in your portfolio as possible. You need most of the money into one or two stocks, and they need to be stocks that are going to move. Some things to look for are:
-Stocks that were beaten up in the past week, or are in sectors that have been unpopular (for example, subprime lenders).
-Stocks reporting earnings soon. Like it or not, smaller companies usually move hard one way or another after earnings.
-Small cap stocks. They require a minimum of 500 mil market cap, so buy something with a low price per share, buy a lot of it, and try to find a few percentage points.

The way I approach it is, if I can make something hit good in the first few weeks, then I'll stay in the game. If your bet fails, then you aren't out much time or effort.

Good luck to anyone playing, and feel free to leave comments on your strategy!

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