How to Win Updated

Yesterday, someone noticed an important discrepancy in the rules that seriously reduces the potential for the risk-seeking strategy described in the post titled How to Win CNBC's Trading Matters Challenge. The contest requires that we start the week with at least $250,000 to be eligible for the weekly prize. This is as opposed to $100,000 as was stated in the original email we all received from CNBC. I'm not sure when the rule was changed, or if it was merely a typo, but Google's cache shows the new rule was published at least as early as the 11th of November.

The principle behind the risky strategy described in the previous post is making big risky bets knowing that if we bet wrongly we can recover quickly enough to place another big bet. The $250,000 requirement makes it more difficult to play the risky strategy, because it takes too much time to recover from serious losses using the trivia bonuses alone. In the worst case of a bankruptcy, it would take 5 weeks to build up enough capital to be again eligible for the weekly prize.

Another consequence of the rule is that new participants are not immediately eligible to be a weekly winner. New participants start with only $100,000 so they have to build up another $150,000 before they even have a chance at winning the weekly prize. If you want to register friends and family, do it now.

So what's the best strategy then? Well in my opinion, the advantage of the risky strategy is gone, but a conservative strategy is definitely not the way to win. My advice is, build your account to $250,000 using the trivia bonuses and a conservative portfolio, then when you think the odds are in your favour, take big risks. You want to win the weekly prize, or get to the top 20 ranks - don't sell out until you get there. Don't take too much risk before you are eligible for the weekly prize or you may end up winning nothing even if you pick stocks that end up doubling. As I said before, trading results over 10 weeks will be strongly influenced by luck. If you take big risks you can end up with mammoth gains or enormous losses, but I guarantee you that the winners will be people that took risks.