The Bolt

There were only four of us who were interested, and we called ourselves "The Investment Club". We requested a copy of the rules (via mail, of course, no email back then) and then registered our team with the Wilfrid Laurier University National Stock Market Competition for Secondary Schools.

We went through the rules and also the copious instructions on how to trade our stocks with the virtual stock market that they had set up for us. It was rather neat - we would use a school computer and a modem to telephone into the stock market competition system, and interact with the system through special commands. It reminded me of the movie War Games, telephoning into a mainframe system. Since I was the one most interested in computers, I was nominated to do all of the data entry, which I was quite happy to do.

The next step was to decide which stocks we wanted to purchase from the Toronto Stock Exchange (TSE). At this point I had a disagreement with the rest of the team. The other three members wanted to spend our virtual $50,000 in a diversified portfolio, buying a few thousand dollars of a number of stocks. I wanted to place all of our money in one stock. They thought that would be too risky, but I thought their strategy was way too conservative for a competition that only lasted a few months. If we wanted to win, we needed to take a risk.

Reading the rules, it stated that we were required to purchase at least ten (10) stocks, so it seemed that their diversified strategy would have to win. In actuality, I did both. I discovered that the rules allowed our little Investment Club to create more than one virtual team, so I created two virtual trading teams: one with their balanced portfolio of stocks, and one with my single stock pick. I still have the printout I created that day with the transactions on it:

Team #330, with the balanced portfolio, at the end of the competition ended up with slightly more money than it started with.

Team #329, with the single stock, ended up winning the national competition!

When news of our winning had spread to other secondary schools across the country, people wrote to us and asked how we did it - what was our strategy, and how did we pick the stocks? I received those letters, but never did reply. I just didn't have the heart to tell them that the stock pick was completely random - I just liked the name Pegasus Gold. That's it. In fact I thought the company had something to do with gold, but later found out they were in the oil industry.

At the end of the school year when all of us were graduating from high school, the four members of The Investment Club got to walk onto the stage and accept four separate envelopes, each with $125 cash in them.

The day that we won a national stock market competition - by a very wide margin - against hundreds of other teams, on a stock pick that was a whim.... I decided that it was all just gambling. Now looking back I can see it's more complicated than that, but not overly so for many "investors". I still don't have faith in the system overall, when market capitalization can be completely unrelated to the health of a company and more related to how in love people are with the stock.

Bless Pegasus Gold, though, for bringing me a $125 graduation present.