Picking winners in a bull market is easy. In a bear market, good luck.
Last week, when the Dow Jones industrial average lost more than 400 points in a single day, the portfolios of every team in The Blade's School Stock Contest took a beating.
For the week, all 95 teams finished with losses to their imaginary starting value of $40,000. But one entrant, the 14-member Mullet team from Woodmore High School, suffered less than all but one other competitor, and as a result, it now leads the 16-week contest.
"They've become very interested in the stock market as a result of this contest. They check the stock prices every day now," said their teacher, Adam Downs, who teaches agricultural business.
For a sterner test, Mr. Downs restricted his class to agricultural-related stocks. "They had about 15 stocks they were looking at and they did think it was a little bit confining, but that was the condition I put on them," he said. "We generally do stuff with futures markets, grain, and livestock."
The Mullet portfolio includes retailer Tractor Supply Co., which was its only gainer last week. It also has agribusiness The Andersons Inc., chicken processor Tyson Foods, and Dow Chemical, which makes agricultural fertilizers.
Despite heavy losses on the Dow, the Mullet portfolio suffered less than a 2 percent loss. Its total stands at $42,257 through six weeks, up 5.6 percent from the outset.
The team that had led for three weeks, Robinson Junior High's Wildbots#2, dropped to second, with its portfolio down 9 percent at $41,901.
"Hats off to any of the teams who outperformed the S&P 500 last week," said Matthew Faltys, vice president and director
of portfolio management for Fifth Third Bank (Northwestern Ohio), a contest co-sponsor. "That means they had to do better than losing 4.3 percent."
He added: "Once again this shows that the teams that give up the least in a down market have the best chance to hold on and win. When the market gets choppy, teams can really separate themselves from the pack."
The SROINUJ team from Defiance High School was in third place at $41,763, and its portfolio had the smallest drop for the week, at 1.6 percent.
More than 1,350 students from 37 schools are entered in the contest, which also is sponsored by The Blade's Newspaper in Education program. All teams started with a $40,000 imaginary portfolio, divided evenly at the outset among the four stocks. The portfolio that gains the most by May 11 wins.
The top prize is $250 for the team and $250 for its school, second place earns $150 for the school, and third place gets $100 for the school. Teams had to select stocks trading at $5 or more by Jan. 19.
Last week, 20 of 95 teams in the contest were in the black.
- Jon Chavez