$100,000 portfolio project: 15% return - Business, Finances and Investing Forum

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$100,000 portfolio project: 15% return

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02-14-2011 , 05:35 PM

TO1

centurion

Join Date: Mar 2005 Posts: 138

This is is an extra credit project for my Finance II class.
The rules are simple:
-$100,000 to invest (Trading simulator)
-The goal is a return of < 15%
-I have six weeks
-There are no penalties for not achieving this return, so the investments can be boom or bust

The moment the portfolio reaches 15%, I can stop right there. Suggestions?

Some background on me:
-7 year professional poker player
-Went back to school last year to study Finance (Interesting in Analyst and Trading positions)
-Very limited knowledge at this point
-Have been lurking this forum for a few months now (It has been an excellent resource so far)

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02-14-2011 , 05:47 PM

FortFun

adept

Join Date: Aug 2005 Posts: 750

Quote:

Originally Posted by TO1

-The goal is a return of < 15%

1) Light money on fire
2) Achieve < 100% return
3) .......
4) profit (extra credit)

In all seriousness, learn how to use the greater than (>) and less than (<) symbols. Also this project is stupid since all it rewards is volatility and says nothing about savvy investing. Go big or go home since you only have 6 weeks, pick some penny stock that's touted by email or fax, great movement in those.

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02-14-2011 , 05:57 PM

FlexNutz

centurion

Join Date: Nov 2010 Posts: 192

agree with above

go here

http://www.google.com/finance/stockscreener

click add criteria

add beta

sort by beta, pick a stock with high beta

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02-14-2011 , 06:13 PM

nuclear500

Carpal \'Tunnel

Join Date: Aug 2004 Posts: 10,516

Pretty sure you meant > 15%

Go with an REIT like NLY or AGNC. Unless the stock drops in price (which is likely tbh), the dividend alone practically guarantees > 15%

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02-14-2011 , 06:25 PM

TO1

centurion

Join Date: Mar 2005 Posts: 138

Yeah it's a peculiar format for a Finance professor to use, particularly since I doubt I'll learn much from doing this. And ya > 15%...

So Beta refers to how an investment is doing relative to that finance market as a whole. When I add that criteria, what kind of time frame is that showing?

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02-14-2011 , 06:26 PM

Brons

Carpal \'Tunnel

Join Date: Mar 2007 Posts: 6,565

Quote:

Originally Posted by nuclear500

Go with an REIT like NLY or AGNC. Unless the stock drops in price (which is likely tbh), the dividend alone practically guarantees > 15%

Time limit is 6 weeks.

This project is dumb. Just randomly gamble it up.

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02-14-2011 , 06:37 PM

dc_publius

Pooh-Bah

Join Date: Nov 2005 Posts: 4,308

Tell your prof to grow some balls and put something on the line so that people take it seriously. 15% of your grade sounds about right.

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02-14-2011 , 06:39 PM

dtan05

Pooh-Bah

Join Date: Feb 2006 Posts: 5,144

seems like just a free chance at extra credit - i'd just buy a bunch of options.

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02-14-2011 , 06:47 PM

guids

banned

Join Date: Oct 2005 Posts: 16,996

buy yourself a monkey

http://www.dailymail.co.uk/news/worl...portfolio.html

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02-14-2011 , 06:55 PM

#10

SuperWhale

adept

Join Date: Feb 2007 Posts: 1,075

Which school is this?

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02-14-2011 , 07:43 PM

#11

Freakin

bacon wannabe

Join Date: Sep 2004 Posts: 17,153

Is this for college or junior highschool? These kinds of assignments are such a stupid idea with nothing at stake.

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02-14-2011 , 07:59 PM

#12

Twentyonenil

grinder

Join Date: Mar 2008 Posts: 504

ProShares UltraPro S&P500 (UPRO)

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02-14-2011 , 07:59 PM

#13

Hielko

old hand

Join Date: Nov 2005 Posts: 1,798

Best bet; go long XIV (this is an ETN that is short VIX futures). These futures have a very high premium (because the volatility of volatility is very high) so when markets stay calm you should be able to make 15% in 6 weeks. If they don't this will drop like a rock.

A more complicated strategy would be to try to take binary bets - start with 15K - and double when you lose. Problem is finding a suitable vehicle to make these kind of bets on the stockmarket; but I'm sure it's there.

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02-14-2011 , 08:05 PM

#14

TO1

centurion

Join Date: Mar 2005 Posts: 138

Clearly this assignment is not optimal for my learning experience, so maybe we can get past that. I'd prefer to see more constructive responses. Much thanks for the few serious responses so far. For what it's worth, the extra credit is adding 3 grade levels to our lowest test score (what a nice professor, I know).

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02-14-2011 , 08:07 PM

#15

nuclear500

Carpal \'Tunnel

Join Date: Aug 2004 Posts: 10,516

Quote:

Originally Posted by Brons

Time limit is 6 weeks.

This project is dumb. Just randomly gamble it up.

ha, I'm blind. I didn't catch that.

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02-14-2011 , 08:07 PM

#16

tastychicken

old hand

Join Date: Sep 2008 Posts: 1,775

Quote:

Originally Posted by FlexNutz

agree with above

go here

http://www.google.com/finance/stockscreener

click add criteria

add beta

sort by beta, pick a stock with high beta

this is probably by far the best advice u can get. buying something safe = autolose

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02-14-2011 , 08:15 PM

#17

Hielko

old hand

Join Date: Nov 2005 Posts: 1,798

Quote:

Originally Posted by tastychicken

this is probably by far the best advice u can get. buying something safe = autolose

This is still too safe, and has too much upside. You should try to pick something with 15% upside, and 100% downside.

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02-14-2011 , 08:18 PM

#18

roundroom

grinder

Join Date: Jun 2008 Posts: 585

buy "blap" and "mjna". wait a month and sell em if they dont explode. i would buy as much as you can. go big or go home. try to short a big stock. im full of awful advice, except for this project.

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02-14-2011 , 09:15 PM

#19

r3vbr

old hand

Join Date: Sep 2004 Posts: 1,984

Quote:

Originally Posted by Hielko

This is still too safe, and has too much upside. You should try to pick something with 15% upside, and 100% downside.

if he can trade options, you can do this by selling covered puts on exactly 15% upside.

if he can only trade stocks, then buy FAS (3x financials) with a sell order placed at 115% the value of the trade.

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02-14-2011 , 10:19 PM

#20

MangoPort

old hand

Join Date: Mar 2009 Posts: 1,379

I'm surprised it hasn't been suggested yet, but why don't you cheat?

Can you backdate your stock trades? If so, that's your best bet - buy today's stocks yesterday.

If it's a web-based tool see if you can multi-account and just gamble a bunch of times.

Alternatively, I would recommend dumping all $100k into a junior Canadian Mining company like Trade Winds Inc. (TWD). It trades on the TSX-venture and has been known to go up or down 10% or so a day.

Pick that or another one at random, and then just hope you get lucky.

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02-14-2011 , 10:19 PM

#21

Mediocre_Player

Carpal \'Tunnel

Join Date: Jul 2004 Posts: 8,594

can you trade Forex for this or does it have to be equities?

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02-14-2011 , 10:59 PM

#22

Shoe

Carpal \'Tunnel

Join Date: Jul 2004 Posts: 11,869

Just put everything in CLDA and hope to ride the momentum.

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02-15-2011 , 01:21 AM

#23

RikaKazak

Carpal \'Tunnel

Join Date: Jul 2005 Posts: 9,662

Take your head, smash the keyboard, whatever first 1/2/3/4/whatever letters you smash, buy that stock, but do it on margin.

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02-15-2011 , 05:09 AM

#24

Zimbo0o

journeyman

Join Date: May 2010 Posts: 324

just put it on 'Red'

you'll endup +200k

Spoiler:

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02-15-2011 , 06:19 AM

#25

YouFaiil

Concept of the Week Author

Join Date: Jun 2010 Posts: 13,505

I would say go for a penny stock which is expecting news in the next 6 weeks, if you go for a mining/oil company and the news is good you'll make way more than 15%.

Here is an example...

http://uk.finance.yahoo.com/q?s=bem&ql=1

News was expected and it was delivered, the iron mine they have license to contains 400m tonnes of iron and then boom.

penny stocks, gogogogoogogogo.

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