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Wealth Daily's $5,000 Stock Picking Contest

$1,000 Cash and $4,000+ in prizes up for grabs

Written by Brian Hicks
Posted May 3, 2010

Think you can pick stocks?

Here's a chance to win $5k with absolutely zero skin in the game.

Wealth Daily is launching our first-ever stock picking contest. It's an opportunity to square off against fellow readers with your top picks.

Keep reading for the full details. Good luck — and may the best portfolio win.

The Prizes

  • 1st Place wins $1,000 cash plus a subscription to Wealth Trust, allowing access to all 9 of our premium investment services for life. (The lowest we've ever sold this product for is $4,495.)
  • 2nd and 3rd place winners get a 2-year subscription to Wealth Advisory, a $158 value.

How It Works

  • The contest runs from May 10 to June 8 (30 days).
  • Each player starts with $100,000 in virtual funds (there's no real money involved here... unless you win).
  • One caveat: Stocks you select must have a minimum share price of $5.
  • Let your friends in on the contest — Send them this link, where they can get info and a password necessary to register.

The Rules

  • You must be an active Wealth Daily e-letter subscriber to win. If you're not getting our free daily e-letter, go to wealthdaily.com/contest to sign up and get your contest password.
  • Only one account per person. (Filters are in place to detect duplicate registrations and suspect activity).

Strategies and Sectors

Remember, this contest only runs for 30 days. So swing for the fences and bring your top speculative picks.

One area I'd recommend is small-cap biotechs. They're absolutely on fire lately. Back on April 19, I wrote about Delcath Systems (NASDAQ: DCTH). The firm, which has a promising liver cancer treatment system, is up 56% since.

Short Candidates

Think the market looks toppy? We are seeing some potentially bearish signs popping up...

First, it's worth noting that bullish sentiment is near decade highs. Historically that has proven to be one of the best contra-indicators around.

When everybody's gung ho, it may be time to re-evaluate your long positions. Only problem is, the market can run 20%+ before correcting. Plus, there's still a lot of Fed liquidity sloshing around. But going against the crowd might be a risk worth taking.

Sector-wise, some investors see commercial real estate due for a crash. If you think this shoe is finally going to drop, you can short a commercial REIT ETF like IYR or a big mall REIT like Simon Properties (NYSE: SPG).

The best short of all may be banks. So far, banks have managed to avoid a major lashing for their misbehavior.

But that's changing... Populist anger in an election year is a powerful force. So after years spent surfing porn and ignoring Madoff/Lehman whistleblowers, the SEC might start doing their job again.

And that prospect scares the hell out of banks.

They'd rather the SEC keep going after high-profile (but meaningless) cases like Martha Stewart's $45k insider trading scandal. But now they're going after what some say is the poster-boy for bad behavior on Wall Street: Goldman Sachs.

And much to the horror of big banks — it looks like the financial reform package may actually have some teeth. "You... you mean we can't gamble with free money and government backing anymore?"

I feel bad for them, I really do. The point is that all this political pressure may actually cut into bank profitability. And clients might start to ditch the firms that are under fire.

If you're looking to short financials, there are plenty of good options. You can short individual investment banks like Goldman Sachs (NYSE: GS) or Morgan Stanley (NYSE: MS). Or you can short a broad financial sector ETF like XLF.

"Ultra short" financial ETFs like SKF are another option. But your timing will need to be spot-on; these ETFs are extremely volatile, due to the options and swaps that give them leverage. Over any period longer than a few days, they inevitably fall behind the underlying index.

How to Get Started

1. Sign up for our daily newsletter here, if you haven't already. You'll get a password required to join the game.

2. Register at Marketwatch.com's Virtual Stock Exchange (VSE). They have a solid (and 100% free) platform for virtual trading.

3. Once you're registered, search for the Game ID at the VSE: WealthDaily (It's case-specific, so capitalize the W and D.)

4. Start doing research! The contest starts next Monday, May 10.

Questions? Post them in the comment section below.

Good luck!

Adam Sharp
Analyst, Wealth Daily

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