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Published: Monday, 8/12/2002

Portfolio dominated by gold stocks still leads

BY HOMER BRICKEY
BLADE SENIOR BUSINESS WRITER

For four straight months, stock prices dropped on Wall Street, but the leader in The Blade's Stock Market Game managed to hold on to his advantage.

Thanks largely to a portfolio dominated by gold stocks, Edwin Harwood, a 47-year-old Monroe car dealer, has remained in first place since May. Before that, four different Blade readers held the lead at the end of each month in the year-long portfolio contest.

By the end of July, the mythical portfolio of Mr. Harwood, general manager of Ed Harwood Buick Pontiac, had gained 32 percent, to $52,636. Each of the 1,300 contestants started with a hypothetical value of $40,000, split equally among four stocks - two traded on the New York Stock Exchange and two on the Nasdaq Stock Market.

At the end of the year, the entrant with the highest portfolio value wins a trip for two to a Las Vegas resort or to Walt Disney World, arranged by Atlas World Travel, a contest co-sponsor. Second prize is $300 cash, and third place is worth $100 cash.

The second quarter was marked by an enormous amount of volatility and “a whopping quantity of selling” as the market sought a bottom, said Ben Padilla, vice president of investments for the Toledo brokerage of Salomon Smith Barney, another contest co-sponsor.

As a result, only 50, or fewer than 4 percent of contestants, had gained portfolio value from the starting amount, Mr. Padilla noted. Of 1,297 different stocks chosen by readers, 970 lost value from Jan. 1 through the end of July, he added.

The ugly bear market of recent months has favored defensive stocks such as those picked by Mr. Harwood, who said he studied the market late last year and concluded gold was undervalued. His big gainer was Royal Gold, Inc., up 122 percent in the first seven months this year. His other gold-related stocks are ASA Ltd., up 34 percent, and Newmont Mining Corp., up 28 percent. His only loser is Symyx Technologies, Inc., a firm that provides technology for the discovery of new materials, down 58 percent.

But Phyliss Bixler of Toledo moved from eighth to second place, mostly because of FTI Consulting, Inc., which gained 84 percent in the seven months. Her portfolio is up 28 percent, to $50,475.

Two other Toledoans - Susan Darmofal and Mark Belella - moved into the top-10 list for the first time on the strength of Immucor, Inc., which gained 135 percent. Ms. Darmofal's portfolio, in seventh place, has risen 18 percent, to $47,064, and Mr. Belella's, in eighth place, has gained 17 percent, to $46,966.

Among three professional challenge portfolios, the best after seven months was that of Jane Sullivan, a Toledo schoolteacher and investment club member, down 18 percent. Two other challengers, both brokers, have portfolios down 35 and 48 percent. The Blade Business Desk's “dartboard portfolio,” chosen at random, was up 1 percent.

Other contestants in the top 10, and the amounts to which their paper portfolios grew through July, are: third, Robert Connelly, Perrysburg, $50,306; fourth, Karen Schroeder, Bowling Green, $49,751; fifth, Don Gambill, Camden, Mich., $48,539; sixth, David Dillon, Sylvania, $47,835; ninth, Mollie Kennard, Inwood, W.Va., $46,136, and 10th, Ron Grant, Sr., Swanton, $46,016.



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