I think CNBC already no the winners based on the trading rules. Insiders and the CNBC
family or friends connection will be the lucky winner

Last edited on: 02-09-2007 10:55 am

Really? If that's the case, I'll quit after the first day and concentrate on the real
thing.

I think stock picking contests are fixed . I usually know after the first day that I'm
never going to win ; there's always somebody that finishes the first day 300% ahead !
It's gotta be insider trading-----after all , insider trading in real life is illegal ,
but I'm sure that there's no law against using it in a contest .

yup, it's a weird situation; lot of luck involved

The contest is really being done to get the CNBC name around further (notice they ask you
for friends to sign up before you close out-and at a jarring 1000 point bonus per
person!). Also, alll picks have to be 500Million market cap stocks and all trades happen
at days close so you really have to take shots. It is a two month contest so forget
diversification. 5% gains won't get you anywhere. The weekly winner will at a minimum
come close to at least doubling his money.

Michael - Yahoo is working, I wasn't there to get it.

But will the timing work out for the CNBC challenge? Didn't TWX take forever to do
anything - at least after his initial buy? I guess we pick carefully one that may move and
be assured that at least that stock won't be a loss?

Here's what I like about the activist trade. Lets say Carl Icah buys Time Warner, TWX, at
$17. He think its undervalued and he also thinks he knows how to unlock that value. So he
starts stamping his feet and asking for changes in the company. Usually an activist spells
out (as Icahn usually does and how he did with TWX) exactly what changes he wants and how
much he thinks the company is worth and why.

In other words, we have all of the following working in our favor:
- we know a genius like Icahn, who has a ton of analysts working for him, has done his
research and is bullish on the stock
- we know a good chunk of his valuation analysis because he just told us
- we know we can get in and out faster than him (or any activist) because they own
millions of shares and usually own more than 5% of a compny. So its harder for them to
move around.
- we know when the stock dips that it has a natural buyer (Icahn, or whatever activist is
in the stock. I'm just using Icahn as an example).
- we know that if they do a proxy fight or hire lawyers, etc then all of those people are
actually working for us, for free, and we can fire them anytime we want (by selling our
shares).

At href="http://worldbeta.blogspot.com/2007/02/little-stock-that-beats-market.html">this blog
post by stockpickr member, Mebane Faber he documents a Morgan Stanley study showing
that piggybacking returns since 1999 has returned 500% versus 20% on the S&P 500. Pretty
remarkable. This is pretty much the reason we made the site. I love this style of
investing.

Yeah James, thanks. I still don't quite understand the activist trade, which I know you
like. Is it making a play on stocks where hedge funds . . .or perhaps Mr. Icahn himself
are leaining (in a Cosa Nostra sense) on a company to bring about a positive change?

By the way, Mike, take it easy on the options stuff. It's a whole other ball game and not
something for the small cap guy.

On the CNBC contest the stock's closing price is the only one that counts!

Last chance NYX going on sale again