Wiley Fall National Challenge: Getting into the winner’s minds

StockTrak, together with Wiley Efficient Learning, promotes the National Challenge during Spring and Fall. Students are challenged to manage a million-dollar portfolio and generate profits over four weeks. We spoke with the winners to better understand their minds during the competition.

StockTrak: Tell me about yourself.

Zach, 8th place winner: My name is Zachary M, and I am double majoring in finance and accounting at the University of South Dakota Beacom School of Business. Until the end of the semester, I was the president of the Investment Club at my university.

Gyula, 9th place winner: I am Gyula D, I live in Budapest, and I study at the Corvinus University of Budapest. I am participating in a student organization focused on investments called the Budapest Investment Club. We focus on the equity market and portfolio management. We are teaching ourselves and our members how to get better in this segment of the financial sector. As for hobbies, I love going to the gym. Since it is all closed due to COVID-19, I built one for myself at home. After seeing the show The Queen’s Gambit on Netflix, I started playing chest more often.

Seven, 11th place winner: My name is Seven Hills P. I am pursuing my master’s degree in business administration at Hofstra University, and I have a bachelor’s degree in business administration from IBS Hyderabad. I am the Chief Human Resources Officer at County Cleaners Corporation. I find HR very interesting and part of what I want to do in the future. Apart from HR, I am passionate about trading stocks, which I do on a daily basis.

Elijah, 15th place winner: My name is Elijah T, and I am currently studying Economics and Psychology at Singapore Management University. I usually trade Forex and I do have my own portfolio where I track stocks. Overall, Psychology greatly helps me with investments since I study people’s behaviors and minds, including my own. It helps me to control my thoughts while investing, avoiding impulse decisions.

Mátyás, 17th place winner: My name is Mátyás V, I live in Hungary, and I am currently studying at the Corvinus University of Budapest. It is my second year as an economics major. Besides the university studies, I am also a member of a student organization called Budapest Investment Club. Since September 2020, I am the co-president of this organization. We work with the investment sector focused on the stock market and try to connect with the local companies in this sector. We intend to learn from more experienced investors. I am also a sportsman. I have been playing basketball since I was in primary school.

Rahul, 18th winner: My name is Rahul T, and I just graduated from the University of California Irvine. My major was Human Biology. I have been trading stocks outside of the school and outside of this competition for a while.

 

ST: When did you start using Stocktrak?

Zach: I started using StockTrak for my investments class last year. StockTrak’s system is very easy to use. I liked that the home screen showed the top gainers and losers of the day. It was interesting!

Seven: I have a friend who reached the top 5 in this challenge last Spring. He introduced me to StockTrak and this competition. As I am passionate about stocks, I thought to try it out in Fall 2020. StockTrak’s website is very easy to learn and adapt. It is an awesome virtual trading platform.

Gyula: I started using StockTrak in Fall 2020. The website is excellent! StockTrak has several tools, articles, and lessons that allow us to learn many things that are not available on the internet.

Elijah: I have been using StockTrak since 2019, because of university competition. I think the platform is pretty good since we can see the indicators you need, the growth from alpha and beta, and even check how your competitors are doing. You build a strong strategy based on the platform’s tools.

Mátyás: Since September 2020. My university has a partnership with Stocktrak so we started using it with the Budapest Investment Club. So basically, all our student club joined this challenge. I love the platform. The trading is very simple to use! I also enjoy the curriculum full of lessons. I was delighted with the content and with the platform.

Rahul: When I was still in school, I joined a StockTrak competition – around 2 or 3 years ago. Then, last Fall, I used the platform again for this Wiley competition. Since I do not have the most significant personal capital, I decided to join this competition to get more expertise. I liked that you could trade more than just stocks and equities, so it was an excellent way to see how I would make my initial impressions. StockTrak help me gain a new way of trading and making smarter decisions.

 

ST: How much did you know about investing before using our virtual trading platform?

Zach: Fair amount. I have been investing my own money for a year or two. So, I would say that I know more than most individuals, but not as much as professionals.

Seven: I started investing in September 2019, around one year before this challenge. I consider myself a trader and I am continually looking at the market to make trades. StockTrak helped me to expand my knowledge and gave me confidence in terms of my strategies.

Gyula: During the challenge, I knew what I was doing and how to use the tools, but I have not been trading for ten years. All this is very recent – I started it in 2019. Before, I had a small portfolio, but now I feel much more comfortable making investments.

Elijah: I started to trade 5 years ago, but only with simple investments. Around 3 years ago, I started trading in a more systematic way, using technical and fundamental analysis. And just one year ago, I started using more sophisticated and quantitative tools. So, you could say a pretty good amount of knowledge before using StockTrak.

Mátyás: I have been interested in it for a while. During the last years of high school, I started reading about the financial market and how it works. I was reading a lot about local and foreign investments. I consider my knowledge above the average for my age.

Rahul: Before this specific competition, I would say I have about two years of training experience. I also have money invested in a mutual fund, and I intend to keep it for a long time. As a trading guy, I have had my ups and downs. I was a very emotional guy while trading – I would put my money on and get excited about it. I learned in the most challenging way that I need to have a strategy. My background is in Human Biology, so I did not go to Finance or Business schools. My knowledge comes from YouTube videos, PDFs, and books.

 

ST: Discipline is one of the most important attributes of a successful investor. Do you have any tips or advice for new investors to become more disciplined?

Zach: Having good risk management is one of the essential things while trading. You need to be able to evaluate (or revaluate) your choices. Also, take the time to validate whatever action you are taking.

Seven: It is essential to have a plan in mind. Having a strategy is easy but sticking to it is hard. It is difficult to follow a plan and know when to enter or exit the trade, defining a limit for your losses is crucial. Generally speaking, it is not easy to control our emotions, but we always should try to put them aside and act according to our initial trading plan.

Gyula: If you are a day-trader, then you should stop it. Do not do that. Think in a long-term plan. You do not need to check the market every morning or every hour. When you see breaking news on TV, wait at least 15 minutes before taking a decision. A good investor is a patient investor.

Elijah: I usually use a spreadsheet to track my gains and losses each day. This is very important since you need to know where you are going. Setting a stop loss is also essential because if an investment is losing too much value, it means you have made a wrong decision. There is no point in continuing. A good investor needs to know how to set a stop loss. Also, learn more about various methods to build different strategies and study a lot about the companies!

Mátyás: I think the most important thing for an investor is calculating the risk. A good investor needs to be able to have a ratio for gains and losses.

Rahul: Everyone is focused on how “easy” it is to make money from a phone or laptop. If it were that simple, the whole world would be doing it now. My advice would be to put your own money in. Do not start with paper trading. Because by trading my own money, I learned that I need to be smarter. It is harder to fully understand your emotions when you are not taking any risk. It hurts a lot more when you see your actual money going away. It is also essential to focus on the process: search, learn, recognize your mistakes, and celebrate your achievements.

 

ST: Who was your biggest role model growing up? How did they impact your choices in life so far?

Zach: My dad. He works in corporate finance, so he guided me into the finance realm.

Seven: Elon Musk inspires me a lot! He did the impossible, even when everyone doubted him. He showed the world that everything is possible if you have the right resources and mindset. He motivates me to not settle for less in life and to do something which creates a positive impact on people around me.

Gyula: My first role model was Steve Jobs, but then he died. I was so sad. Then, Elon Musk became my role model. I still love the guy, and he is truly amazing. But there are other people who I admire, like Bill Ackman. He is a great investor! I also like Warren Buffet’s methodology.

Elijah: The biggest role model in my life, at least now, is currently my best friend. He has traded with much less quantitative backing although it is still well thought out. He has the mentality to enter opportunities as soon as it arises, and sometimes gut feelings can be much better than all those calculations. After all, correlations change over time especially now during the COVID situation. I have learned to adapt his way of thinking in some of my trades during the competition as well; such as grasping the rise from Neo and Tesla. Of course, there are some downsides like that of Fastly, but ultimately, it could have its benefits. I think, amalgamating both of our trading styles will find the right middle ground to investing right now!

Mátyás: Basically, some NBA basketball player. I learned a lot from this sport, from working hard to putting your heart into everything you do. Also, any prominent investor is a role model since I can learn and acquire a lot of knowledge.

Rahul: I would say Nassim Nicholas Taleb, the author of the Black Swan series. He is my inspiration because he has a rigorous process, and he follows the actual math rather than narratives. He goes outside the traditional viewpoints, such as economists’ opinions. As someone with no financial background, Nassim intrigues me. He shows me that even if I do not have a strong background in a topic, I still can be successful – as long as I follow the math.

 

 

ST: If you participated in another similar challenge, what would you do differently next time?

Zach: To get into the top 20, I took a lot of risks during the competition. More than I would take in my portfolio with my own money. In a competition with e-trading (not real money), I would have a similar risk tolerance to this time. But I would take more time looking at the trades I was making, searching more about the companies, and making sure my order is placed correctly.

Seven: During this challenge, I had to focus on my studies as well, so I could not check my portfolio frequently. I only made seven initial trades based on research and I did not control my profits and losses. I ended up losing more than I expected. Next time, I would focus more on the challenge to make adjustments when my strategy failed.

Gyula: I would put more percentage from my portfolio into short-term growth companies. Also, I would not short ETFs. They were unnecessary.

Elijah: Nothing. I would not change anything in my trading strategy. Currently, I employ a portfolio of 40% high potential growth stocks (those that could flip multiples such as pharmaceuticals during COVID), 40% high volatility stocks, and 20% normal growth stocks. This trading strategy will remain. The only thing that would be different is the stocks. Generally, in a challenge the goal is to aim for the top few positions. Just take on extreme amounts of risk. However, for real-life trading, perhaps play it safe.

Mátyás: I would start trading from the beginning since I missed the first weeks of the challenge. But, overall, I was satisfied with my results and strategies.

Rahul: Since I gained a lot of knowledge during this competition, I would probably use this new knowledge to make better choices. I would continue to focus on following an objective process by collecting relevant data, back-testing it, and watching flow and sentiment to gauge how others are feeling about the market as well. I would also try to control my emotions better and follow how money is flowing into specific sectors to maximize and leverage my opportunities.

 

ST: If you won the lottery, would you choose $1 million dollars right away, or $50,000/year for 20 years, and why?

Zach: I would take the $1,000,000 because I would invest the money for a higher payout and take advantage of the time value of money.

Seven: I believe in the world’s most powerful financial tool, compound interest. I would pick 1 million dollars right away and invest it into stocks and indexes as a safe haven from inflation. I would also take advantage of dividend-paying stocks to facilitate passive income.

Gyula: I would choose 1 million right now, and put it into a highly diversified portfolio. The present value of the million right now is mathematically higher than the 50k/year for 20 years. That money would be spent each year, but the million would be invested.

Elijah: I would choose the $1 million dollars right now. With the discipline to invest wisely, this amount could grow substantially over these 20 years. Yet, if the amount is $100 million, then I would rather have it over 20 years to prevent myself from splurging in any way.

Mátyás: 1 million dollars right now. The money that I have now is more valuable than future money. I could also start investing right now and see the profits in 5, 10, or 20 years.

Rahul: Knowing you need to pay the taxes, I would take the 50K over 20 years, mostly because it will be extra money that will compound over the years. I do not think it is smart to choose 1 million dollars right away because you are losing way more money at the end of the day.

 

ST: Which books, articles or training would you recommend to others to improve and expand their knowledge of investing and/or financial markets?

Zach: I have read many books and done a lot of training, but I would not recommend any of them specifically. I believe it takes a conglomerate of different books and self-learning to get the best education.

Seven: There is no one book that can help everyone. It is subjective and depends on how the reader utilizes it. I liked to read The Richest Man in Babylon and The Intelligent Investor. These books helped me a lot to build my strategy.

Gyula: StockTrak’s website is perfect. If you read all the articles there, you can learn a lot about every aspect of financial markets. Another great website is Bloomberg. There, you can check some analysts’ opinions as well as catch up on the news. I usually navigate through Investopedia as well!

Elijah: I hardly read books about investments. I feel that perhaps investing needs to be based on experiences – trials and errors. Of course, part of my knowledge comes from school where the knowledge can be used to further augment the experiences to provide ourselves with our own worldview of finance. You may be the best paper trader but when it comes to managing real cash, your hands may tremble, and you fear the risks. Books provide only as much as the bungee you need for a jump; you will need the confidence to do so.

Mátyás: I think it is always interesting to read books written by famous investors, like Warren Buffett or George Soros. They usually share their life experiences and how they achieved success – and this can be very inspirational. People should also read articles and blogs, such as the ones in Stocktrak. There is a lot of online content that is useful for young investors.

Rahul: I genuinely recommend Nassim Nicholas Taleb’s books, even if they may not be specifically about investing money. His books provide a lot of knowledge that can be used in your daily life – which can also be applied to investing. Also, go on the internet! There are so many free PDFs and communities that can give out a bunch of resources.

 

ST: If you could ask anyone (dead or alive) one question, but only one question, who would it be, and what would be your question?

Zach: Because I am a Christian, I would ask Jesus what our purpose in life is.

Seven: I wish to have a one-on-one conversation with Elon Musk. A lot of people were against Elon’s ideas. So, I would ask him how he was able to go through his beliefs, never give up, and be where he is now.

Gyula: I would ask Bill Ackman: What do I need to do for you to hire me? Straight to the point!

Elijah: I would ask Adam, the first man on Earth: ‘Why did you eat the apple?’ God gave him a law to follow, so I would like to understand what he had in mind to eat that apple. Adam also knew that God created humans, having power so infinite. So, I would question how he had the audacity to go against God. As a psychology enthusiast, this could greatly help us understand what went on the most primal human being – to go against certain cognitive biases that we have.

Mátyás: Hard question. I don’t know who it would be, but someone who could answer the following question: When will the world go back to normal finally? Since we’ve been living with restrictions thanks to the COVID-19 for a year I am curious when it will go back to normal.

Rahul: I would ask Naval Ravikant, the co-founder, chairman, and former CEO of AngelList: How to spot potential through the noise?

 

ST: Last question, what do you think the world would be like if everyone understood financial literacy?

Zach: It would be perfect for society, but it would be tough for professionals to stay in their fields. Financial advisors would not have a job, for example. We also would not have so many good opportunities in the market to invest since there would not be so many fluctuations. But for it would be better for the population.

Seven: If everyone knew how to manage money and finances properly, we would have more wealthy people in the world. Financial markets would sound encouraging, not a taboo like in some countries. It would remove the preconceived notion that markets are risky, markets are safe if you know what you are doing. In fact, I think it is essential to learn about financial planning, stocks, investments, and money management as a part of the curriculum in schools.

Gyula: No one would clean the toilets – and that is not good. We need people working in essential jobs. Until we have machines to drive buses, we still need drives, for example. If everyone knew about finance and money management, we would have fewer opportunities on the stock market and investments.

Elijah: If everyone understood finance, the market would be much more efficient. We would not see fewer occurrences of imperfect information of a particular stock – loss gaps, less swings – for example. Though, I would say that our economy could suffer as a result since people would start saving and not spend so much money. Also, a lot of jobs, such as financial advisors or private bankers would not exist, as well as some industries along with it. The world we live in would change a lot! Many industries that rely on people’s inability to save, or easily influenced by persuasion or marketing gimmicks such as that of e-commerce, could very well be impacted too with lower sales volumes!

Mátyás: Trick question. The market would be more efficient since people would understand more about it. I guess the economy would be better and grow, looking at it from a long-term perspective.

Rahul: The world would be more independent and, in a way, much better. People would be able to make smart decisions based on their knowledge. And even if someone makes a wrong decision, they will accept the challenges with a better conscience. -stocktrak.com

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