Tycoons Row

So today is the launch of CNBC’s Million Dollar Portfolio Challenge.  I was up bright & early listening to what has been happening on the markets.  Today, it started out sluggish, and losses have been extended.  Real Estate Investment Trusts were moving down, foreign investments curtailed American investments, Wal-Mart is prying too much.  This was just a weird day for Wall St. overall.  The DOW closes down at 65.54, Nasdaw down 27.32 & S&P 500 13.74.  What does this mean?  I’ll get to this in another post.

For the challenge, there were many issues going on.  The word throughout the blogosphere was that people didn’t know how to invest on the challenge.  People were writing in directly to CNBC requesting clarification.  CNBC’s retort was go online & “read the rules.”  It’s evident when people signed up, they just clicked on “Yes, I agree” & let me in, rather than scroll down through the 30,000 word rules of engagement.  So, here, is a small breakdown of what you need to know & some insight on the challenge:

• As of 4:07 pm, there are over 200,00 people that have entered.
• There will be 10 weekly winners
• Your bid won’t be executed until the close of the business day.
• A day is defined as 4:00pm to 3:59:59 PM on the next trading day - Eastern Standard Time.
• You have a limit of 50 trades per day.
• There are no commissions on the trades.
• There are no limit orders, open orders, short selling, margin buying, & trading derivatives, options, bonds, mutual funds, ETF’s or other types of securities are not permitted.
• What this means is that it’s straight to the Dart Board Baby
• For investing, stocks must have a market capitlization of $500 million at the close of the market as of March 2nd 2007.
• IPO’ that take place after March 2nd, 2007 will not be eligible.
• There is

So that’s just a bit of information about this challenge.  How does this relate to investing in reality.  Well, knowing the rules will allow you to form your investment strategy.  First, is understanding the market & 2nd, form your strategy.  So, in the next few days, I aim to provide my understanding of the market by defining the terms that people throw around & never really explain.  Today, I will explain what my strategy is going to be.

My Million Dollar Portfolio Challenge Strategy

The first day consist of only buy or “do-nothing” trading, based on the rules of the challenge.  Trades will only be executed at the end of the day, therefore, I feel it’s best to only purchase the following types of stocks:

• High Market Capitalization
• High & Potential for Volatility
• Low Share Prices

To win every bonus challenge possible & get referrals.  I came up short on this.  I won the bonus bucks round by answering the question right.  The question was what is Blackstone Group planning to invest in.  The answer was Daimler-Chrylser.  The question I got wrong was how much the Heng Seng index fell today.  You have to get the answer exactly right.  The information I received was bogus.  So, from now on, I will clarify my sources with back up information.

I aim to target specific industries.  They will be the real estate market, technology market, and pharmaceuticals, and companies who are raked in scandal.  The reason I select these market specifically are the following:

1.  Real Estate Market:  Right now it’s volatile.  The number of foreclosures are rising.  There are companies & investors planning to jump on a turbulent market, but there are also ship jumpers.  This is an area where swing can go either way.

2.  Technology Market:  Selecting the right company can bring excellent results.  This will be a competitive market, but it will only be key to select companies with low share prices.

3.  Pharmaceuticals:  It will only be beneficial to the investor by reading the reports on what breakthroughs that have been made.  These are companies that have to produce real results & quality results, as health care and particularly medicine is what can move an economy just on emotion.

I will update this when the top players come up & my pending orders have been transacted.