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Published: Sunday, 1/9/2005

Steeling the way to victory in The Blade's Stock Market Game

BY JON CHAVEZ
BLADE BUSINESS WRITER
Dorothy Sutter, in a hard hat symbolizing her portfolio's role in industry, chose her stocks in honor of her hometown roots. Dorothy Sutter, in a hard hat symbolizing her portfolio's role in industry, chose her stocks in honor of her hometown roots.
SIMMONS / BLADE Enlarge

As the old saying goes, sometimes it's better to be lucky than good.

Sylvania resident Dorothy Sutter could have picked a hypothetical stock portfolio of trusted, good-performing stocks. Instead, she took a flier on four steel industry stocks, saw one skyrocket because of an unexpected merger, and as a result is the winner of The Blade's Stock Market Game.

Mrs. Sutter, 50, who admits she got some advice from her husband, Gary, finished last year with a fictional portfolio totaling $104,211.18, up 161 percent. She bettered second-place finisher David Gable, of Gibsonburg, by about $7,000.

"When the contest first started, it was bad," Mrs. Sutter said of her entry. "I was way down the list. But when it began to rise I was really surprised. I was surprised that it stayed as high as it did.

"Now I wish I really had that $40,000 to invest in them."

Mr. Gable, 70, slipped ahead of longtime contest leader Doris Steinberg, of Toledo, in the final weeks and finished with $97,384.96, up 143 percent.

Ms. Steinberg, 61, ended up third, at $94,168.74, up 135 percent.

The game drew 1,021 contestants vying for a top prize of airline tickets for two to any city in the continental United States, courtesy of Atlas World Travel, which was a contest co-sponsor. The Sylvania Township office of Smith Barney was another contest co-sponsor, tabulating the results.

Entrants had to pick two stocks worth at least $5 from the New York Stock Exchange and two from Nasdaq before Dec. 31, 2003, and they began with a hypothetical $40,000 split evenly among the stocks. Winners were determined by how much those portfolios grew by the close of the markets on Dec. 31, 2004. Second prize is $300 cash, third prize is $100.

Three professionals were selected as challengers, who were not eligible for prizes. The top finisher among those was Ted Sipes, of Bowling Green, a retired teacher and president of the Northwest Buckeye chapter of the National Association of Investors Corp. His portfolio gained 35 percent.

Mark Evans, of Trust Co. of Toledo, made selections that rose 17 percent, and the hypothetical portfolio assembled by Sarah Berndt, of Fifth Third Bank's Investment Advisors division, gained 10 percent.

A Blade "dartboard" portfolio, picked totally at random, gained 29 percent, beating more than 800 contestants and two of the three professional challengers.

Steve Wagner, a financial planning specialist at Smith Barney, said some contestants tried to pick potential high-growth stocks too close to the $5-a-share threshold, and found that by the time the contest began some stocks had dropped below $5, eliminating their entries.

"There were opportunities to be had, you just had to do your homework on the industries and stocks with potential," he said.

Mr. Gable, for example, was the sole person to choose Nov-

Atel Inc., a Calgary, Alberta, firm specializing in global positioning systems. Its stock rose from $8 a share to $44, a spectacular 436 percent gain.

However, Mrs. Sutter, who faced competing entries from her husband, two daughters, and son-in-law, also picked a huge gainer.

Her winning portfolio contained Wheeling Pittsburgh Corp., of Wheeling, W. Va.; Steel Dynamics Inc., of Fort Wayne, Ind.; AK Steel Holding Corp., of Middletown, Ohio, and Ispat International NV, a steel firm based in Rotterdam.

In October, Ispat bought Akron-based International Steel Group, forming the largest steel company in the world, now called Mittal Steel NV, and driving Ispat's share price from $9 a share to $39.

It also did not hurt Mrs. Sutter that the steel industry was poised for a boom, and then delivered. Mittal gained 336 percent, AK Steel 184 percent, Steel Dynamics 65 percent, and Wheeling Pittsburgh 58 percent.

Mrs. Sutter, originally from Michigan City, Ind., grew up in the shadow of steel mills. She said a televised report last year suggested that the steel industry was poised for a huge rebound, so in homage to her roots she chose an all-steel stock portfolio. Her husband gave her several suggestions.

Mr. Gable, the second-place finisher, chose a more diversified portfolio. Besides NovAtel, he picked MGM Mirage casinos, of Las Vegas; Equinix Inc., of Foster City, Calif.; and Finland-based Nokia Corp.

Mr. Gable said a friend, Martha Camden, who belongs to an investment club, provided him with 16 stock suggestions for his entry. "She gave me some good choices. She did well with them," he said.

NovAtel was the big winner, but Mr. Gable said he settled on MGM Mirage, which had a 93 percent gain. "They're a casino and the house always wins. They always make a profit," he said.

His picks almost led to his winning the contest. On the final day, his and Mrs. Sutter's entries were just $600 apart. But steel stocks surged on Dec. 31 and profit-taking on Mr. Gable's hot stock, NovAtel, cut its value by nearly $3 a share that day, ensuring he wouldn't win.

Mrs. Steinberg said her picks, which were Elan Corp. PLC of Ireland, Novatel Wireless Inc., of San Diego; Costco Wholesale Corp., of Issaquah, Wash., and Western Digital Corp., of Lake Forest, Calif., were a collaboration between herself and her son, Marc, 32.

She led the contest from the end of February through November, based mainly on the strength of Elan, a biotechnology company. "It was a good run, but it was just a game and it was one of these things," she said.

As for how she will use her airline tickets, Mrs. Sutter said she might travel to San Diego or Seattle. But she said the real prize is the championship title she can tout within her family.

"The last time out of the five of us, I was last," she said, referring a prior contest. "Now, I have bragging rights."

One neighbor on equal footing with her, though, is Kathy Muneio, who won the stock contest in 1997.

Mr. Wagner, of Smith Barney, said the top three finishers for the 2004 contest earned their spots by taking big risks, which is what one must to do in a contest setting. "If you pick a solid diversified portfolio, it's going to finish in the middle of the pack," he said.

But many entrants picked well-established stocks rather than unknown but potential stars.

Possibly guessing that the Bush administration would help pharmaceutical firms in an election year, Merck & Co. and Pfizer topped the list of most popular choices of NYSE stocks. Both were hurt by drug recalls and ended the year down, Merck by 30 percent and Pfizer by 23 percent.

Five of the 10 most widely picked Nasdaq stocks lost value during the year.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.



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