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Published: Sunday, 1/21/2007

Fired up by energy

BY HOMER BRICKEY
BLADE SENIOR BUSINESS WRITER

NEARLY 900 Blade readers gave it their best shot. They picked 1,200 different stocks for their portfolios entered in The Blade's Stock Market Game for 2007.

"It looks like a lot of people went for energy stocks, technology, and Internet companies," said Shane Ewbank, a financial adviser with the Toledo office of brokerage firm Smith Barney.

The firm is co-sponsor of the contest and the tabulator of results.

Many of the readers' favorite selections are big, well-known, actively traded companies, but one of the most popular choices is better known in this area than it is on Wall Street - First Solar Inc., picked by 41 entrants, or about 5 percent.

One entrant selecting it was Thomas Hanus, of Point Place, a 51-year-old Toledo policeman.

"There was no thinking," he said, explaining his pick. "I just jumped in and did it."

The contestants had to select two New York Stock Exchange stocks and two Nasdaq stock market stocks before Dec. 31 that were trading for at least $5 each.

They were allotted $40,000 for a hypothetical portfolio divided evenly among the four stocks. Midway through the year, they will be allowed to change one stock.

Thomas and Donna Hafner, looking over The Blade's stock listings in their Point Place home, said their contest picks are made up largely of stocks they have owned, including General Motors and Sun Microsystems. Thomas and Donna Hafner, looking over The Blade's stock listings in their Point Place home, said their contest picks are made up largely of stocks they have owned, including General Motors and Sun Microsystems.
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The winning portfolio is the one gaining the most value by the end of 2007. First place wins $100 cash and a trip for two to Chicago, Toronto, or Tampa. Second place wins $300 cash and third place gets $100 cash. The trip, including transportation and hotel, will be arranged by Central Travel of Toledo, a contest co-sponsor.

As in prior contests, this one has challenge portfolios, which are not eligible for prizes.

They are from Sylvania Town-

ship financial planner Bill Harris; Toledoan Terry Carey, president of an all-woman investment club; and a "dartboard portfolio" chosen at random by The Blade's business desk staff.

"I think the contest is a great idea," said Mr. Harris. "It's a great way of generating awareness of investing."

Mr. Harris said it's hard to choose a portfolio that will show outstanding performance in just a year's time. "We tell our clients that long term they need to [deal with] a complete business cycle of three to five years," he said.

However, he added that he believes foreign stocks and oil stocks will do well this year, despite the recent drop in crude-oil prices.

The dartboard picks in last year's contest finished 177th, up 27 percent in value and better than 85 percent of the contestants' portfolios.

The most popular reader choice on NYSE this year is the drugstore chain Rite-Aid Corp.

"I love Rite-Aid," said Donna Hafner, 67, of Point Place. "I buy Christmas and birthday presents at Rite-Aid."

But many may have chosen the company because of its expansion plans involving a $4.8 billion acquisition of two other drug operations.

Mrs. Hafner and her husband, Thomas, a 68-year-old retired Dana Corp. assembly-line worker, said their contest portfolios are made up largely of stocks they have owned, such as General Motors Corp., Sun Microsystems Inc., and Level 3 Communications Inc.

Mr. Hanus, who picked First Solar, which evolved from a Toledo research and development operation into a Phoenix firm with its only solar-panel plant in Perrysburg Township, also chose insurance firm American International Group Inc., and Luxembourg com-

panies Tenaris SA and Millicom International Cell-

ular SA.

Picking a diversified portfolio was Toledoan James Frey, a 55-year-old accountant for Schindler Elevator Corp. in Springfield Township.

He selected Sun Microsystems and Level 3 as well as Radio Shack Corp. and America Movil SA de CV, a Mexican wireless-communications firm.

In the past, the most popular picks by contestants have a spotty record.

In 1999, for example, the majority of picks did well, and the favorites' portfolio was up 63 percent.

But in 2003, all top 10 NYSE and top 10 Nasdaq choices fell, for a combined drop of 31 percent.

Last year, nine of the top 20 selections gained, and over all, the group increased just 2 percent in value.

How the popular picks will fare this year is tough to predict, Mr. Ewbank said. But many entrants apparently tried to get a bit of an edge by loading up on low-priced stocks. "They want to get more bang for the buck," he said. "A $1 increase in a $100 stock is just 1 percent, but a $1 increase in a $6 stock is 17 percent."

Challenger Mr. Harris, with Informative Financial Services, chose ExxonMobil Corp., JP Morgan Chase & Co., Level 3, and Diamond Hill Investment Group Inc., an investment management-services firm.

Ms. Carey, president of Moneybags of Northwest Ohio investment club, picked refiner Valero Energy Corp., video game maker GameStop Corp., Costco Wholesale Corp., and Starbucks Corp.

The dartboard portfolio consists of Mid-America Apartment Communities Inc., a real-estate investment trust; Imperial Tobacco Group PLC; ICT Group Inc., outsourced customer management; and retailer Books-A-Million Inc.

Contact Homer Brickey at:

homerbrickey@theblade.com

or 419-724-6129.



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