CNBC Million Dollar Portfolio Challenge - Monday, Week 1

Trading started today at 9:30 am (you can still sign up), though things are already a bit squirrelly.  Accessing the portfolio manager page sometimes returns an error screen (though that problem seems to be less frequent if you're using Internet Explorer rather than Firefox) and clicking on one of the portfolios returns a "portfolio not found" error.  Also, the first round of trivia questions was supposed to be posted at 6:00 am, but is thus far unavailable. [Update: problems solved (mostly) and trivia questions added, see below.]

I've put in a support request to the contest admins.  Hopefully this is just first day gremlins, but given the way last year's contest quickly descended into mayhem with the multiple account debacle, we're off to an inauspicious start.

While we're waiting, let's strategerize.  (Consider all of the following for entertainment purposes and not meant to be used as real-world investment recommendations.)

I mentioned last week that this year's contest has remedied some of the issues that tended to encourage moon-shooting strategies last year.  Specifically, they no longer allow multiple account creation (beyond the 5 portfolios available to a single player) and they've eliminated the "finals round" which allowed each weekly winner to compete against the overall high scorers (meaning there was little incentive to avoid massive downside during any given week).  A good strategy last year was simply to allocate 100% of the portfolio into a single name where you could expect high volatility (i.e. a company that would report earnings the next day).

Volatility for volatility's sake is a riskier way to play it this year, but still perhaps an interesting strategy.  After all, there's still something to be said for shooting the moon when the prize structure is still a Ricky Bobby style "if you're not first, your last."  In fact, you can be up to 6th in overall performance and still share in the million dollars, but given the large number of players (roughly 600,000 portfolios already registered), you'll still need a blowout performance.  Plus, there are still some valuable weekly prizes, so volatility is still your friend this year.  That said, the game limits your allocation to any single stock at 25% of your portfolio value, so it's harder to do well with a single good guess.

And remember your portfolio has to be worth at least $250,000 to be eligible for any weekly prize, so if you lose more than 75% of your initial allocation, you're in the penalty box until you recover above that threshold.

If you do elect to play the volatility strategy, you've got several options today.  The following companies all report earnings either after today's closing bell or before tomorrow's opening bell.  So any position taken today before 4:00 pm will process at today's close and see its first market exposure tomorrow (Tuesday).

                                           

Symbol	Name
DRL	Doral Financial
WNR	Western Refining, Inc.
HIT	Hitachi Limited
NSANY	Nissan Motor Co. Ltd.
STO	StatoilHydro ASA
CCJ	Cameco
CSIQ	Canadian Solar Inc.
TJX	The TJX Companies, Inc.
GU	Gushan Environmental Energy, Ltd.
REP	Repsol YPF

That timing issue is one that warrants a little closer attention, since it'll be important throughout the contest.  Whenever you enter a trade, it gets processed at the next closing bell.  So if you enter a trade at 11 am on Monday, it'll process at 4 pm Monday, so the first day of exposure you get is Tuesday.  If you enter a trade after 4 pm on Monday, it'll process at 4 pm on Tuesday, and the first day your position can move is Wednesday.

That 1-2 day lag in the actual price change is a little nonintuitive.  It also means each weekly marking period (as used to determine the winner of the weekly prizes) is based on the trades you enter between Friday at 4 pm and Thursday at 4 pm (rather than Monday-Friday, as would seem logical).

See all related posts in the CNBC Portfolio Challenge archive.

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Update: The system now seems to be working.  Trade away!

Update:  I take it back - the system is not precisely "working" in the strictest sense of the word.  You can enter trades and they seem to go through, but they seem prone to blinking out of existence without warning, forcing you to re-enter your orders.  This doesn't bode well.

For what it's worth, the currency trading section seems to be more stable.  Sadly, I'm afraid you're not going to find any worthwhile currency trading advice here.  I'm just taking the maximum short position in EUR/USD (betting on the dollar strengthening versus the euro) and letting it ride for the next 10 weeks.

Update:  Scratch Gushan Envrionmental (GU).  It should be eligible (NYSE-listed, market cap >$500 million, average volume >10,000/day), but it's not.  It's the ADS of a foreign company, but so are others on the above list, so I'm not sure why it's ineligible.

Also, if you're having trouble with the currency trading (specifically, it takes several minutes to load your portfolio or you get the error "Service is unavailable now. Please try again later."), you're not alone.

Update: A reply from CNBC Customer Care regarding the various site problems:

Due to overwhelming interest some users may not have been able to access the Contest this morning. We are aware of the page errors on portfolio challenge and are actively working to fix. We regret any inconvenience this may have caused.

If these problems persist, it ought to take care of that "overwhelming interest" problem in a hurry.

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Monday, May 12th

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk On the Street: "In his Trader Talk blog, Bob Pisani had one April entry entitled Hot Fertilizer. Name one of the stocks he discussed."

  Answer:  CF Industries

The Call: "On Monday, April 28, James Altucher of Formula Capital recommended which food-inflation trade to CNBC viewers?"

  Answer:  Sadia

Power Lunch: "On April 25, Tech Check's Jim Goldman blogged on Microsoft’s Yahoo bid. How did he describe Microsoft CEO Steve Ballmer’s “rule”?"

  Answer:  Iron-fisted

Street Signs:   "Mark Travis said he likes "redneck stocks." On April 24, The CIO of Intrepid Capital Funds recommended:"

  Answer:  Comcast

Closing Bell:  "Jim Cramer has a cameo in Iron Man, judging the mythical Stark Industries. What is Stark's make-believe ticker symbol?"

  Answer:  SIA

Weekly Bonus Quiz:

Question:  An MACD crossover reading above ____ indicates upward momentum.

  Answer:  0