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Strategy Lab / Round 16, 1/4/2008 12:01 AM ET

5 amateurs who kicked the market's tail


Strategy Lab is MSN Money’s stock-picking challenge. To learn more about the game -- and the contenders -- click here.

Happy blue year?

The market kicked off trading in 2008 on Wednesday with a truly terrible day. The Dow industrials ($INDU) shed 221 points, and the S&P 500 ($INX) and the Nasdaq Composite ($COMPX) were off by similar percentages. It's like Santa gave us a rally for Christmas and then came and took it all back, along with the silverware.

Things started better on Thursday, but only a little. You have to wonder now whether The Street will test the lows of August and November. The market bounced about the same point each time, with the S&P 500 around 1,400. But can it pass the test a third time?

That hasn't meant great things for our pros here in Strategy Lab. Accelerator Price Headley is holding the lead with a 3% gain over just under six months because he's all in cash. High IQ trader Kelley Wright is just behind, with a gain of around 2.5%. And beyond that, well, there's once again just red numbers.

Instead, let's praise five savvy amateurs who handed the market its lunch in the Strategy Lab Open, our just-wrapped qualifying tournament for an amateur slot in the next round of Strategy Lab. There's the player with the handle "Stocksshah" (real name is Sayed Shah), who gained 49% in five months, much of it from a slate of China solar stocks -- hot lately and a popular choice for many in the game. "If you want your grandchildren to remember you as 'our' grandpa who invested in the mighty 'XYZ' Chinese or solar company, then the time to put in your money is right now. The musical chairs game that this market is playing will be smoothed out as soon as the market understands that even if there is a recession in the US, the globe as a whole will be able to march forward at a reasonable pace."

Player James Shao, who actually runs a small company offering a stock-picking system, scored a 45% gain. He, too, tapped solar and alternative energy stocks, and he flirted with airline stocks -- a beaten-up group that also drew some attention but hasn't exactly turned around.

Mark Ballard, known in the game as "Bankchamp," came up quickly in the game's final days to claim a spot in the top five. He won big on Potash of Saskatchewan (POT, news, msgs), also a winner for Global Guru Nicholas Vardy in the regular Lab, and on Monsanto (MON, news, msgs), which quietly climbed 40% in the last three months to an all-time high.

Keith Barton, aka "KBarton10," was among the many who flirted with short ETFs during the round, adventures well-chronicled in his blog. But most of his 34% gain seems to have come from names like Potash, Monsanto, Apple (AAPL, news, msgs) and VMware (VMW, news, msgs), which hit the market in August, soared and then slipped, but still shows a 60% gain.

And then there's "Dishwasher," Vad Yavinski, who lacked the late rally of our other top finishers (and the heavy bets on solar stocks) but scored high marks for consistency. His portfolio ranked among the top five in the Open virtually every day over those five months.

We've spent the past few days reviewing these finalists' blog posts, and we're talking to each of them. Next, we'll select a winner to join the next round of our game and play alongside the pros.

Each one, of course, beat the returns of our Strategy Lab pros quite handily. To a point, we expected that. We ask our pros to trade as they do with real money, and often, with other people's money. In a contest, you're free to swing for the fences.

But these five all traded full portfolios, rather than just finding one lucky pick. They weren't afraid of risk, certainly, but they didn't play the market like a roulette wheel. Click on the links above, and you'll find a lot of solid advice and some fascinating lessons learned.

New to Strategy Lab? Learn how the competition works in the Strategy Lab Primer

They aren't big-dog gurus, of course, just everyday investors like us. Who happen to be either very good or very lucky in a rough market that required both.

Take a look, and drop me an e-mail to let me know what you think about the Open and our finalists. We'll zero back in our regular game next week as we head toward the current round's end on Jan. 18. In the meantime, watch the Strategy Lab Open Web site for more news.

Meet the new strategists at The Money Show

Once again next month, we'll be gathering a panel of the players from the next round of Strategy Lab at The World Money Show in Orlando, Fla., at Gaylord Palms Resort, Feb. 6-9, and you're invited.

That's just one of more than 320 workshops and presentations designed to help you decide what to buy and sell in 2008. You'll have access to advice from more than 120 Wall Street experts, including MSN Money columnists Jim Jubak, Jon Markman and Tim Middleton. Admission is free for MSN Money users. Call 800-970-4355 and mention priority code #010333 or register online today.

By Ron Prichard

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Ken KamAll-Star TeamKen Kam
strat lab
Total current number Flow
$86,485.78 Decrease 13.51%
Journal Entry: 1/7/2008
Tobin SmithChangeWave InvestorTobin Smith
strat lab
Total current number Flow
$92,030.44 Decrease 7.97%
Journal Entry: 11/29/2007
Kelley WrightHigh IQKelley Wright
strat lab
Total current number Flow
$100,654.50 Increase 0.65%
Journal Entry: 12/13/2007
Nicholas VardyGlobal GuruNicholas Vardy
strat lab
Total current number Flow
$94,232.72 Decrease 5.77%
Journal Entry: 12/24/2007
Price HeadleyThe AcceleratorPrice Headley
strat lab
Total current number Flow
$103,140.90 Increase 3.14%
Journal Entry: 12/3/2007
Kelley WrightDog PoundRobert Walberg
strat lab
Total current number Flow
$85,761.82 Decrease 14.24%
Journal Entry: 1/4/2008

Index Comparison

Round 16 start: 7/16/2007

strat lab
symbol Flow
Dow -7.96%
Russell 2000 -15.60%
Nasdaq -7.35%
S&P 500 -9.07%

Final Portfolio Totals

1/8/2007 - 7/6/2007

strat lab
Total current number Flow
All-Star Team
$116,660.17 Increase 16.66%  
High IQ
$109,546.42 Increase 9.55%  
Dog Pound
$107,997.29 Increase 8.00%  
WStreet Strategist
$104,824.86 Increase 4.82%  
Value Shopper
$102,156.50 Increase 2.16%  
CNBC Champ
$91,270.86 Decrease 8.73%  

Index Results

Round 15 start: 1/8/2007

strat lab
symbol Flow
Dow 9.46%
Russell 2000 9.53%
Nasdaq 9.11%
S&P 500 8.24%