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CNBC Million Dollar Portfolio Challenge - Monday, Week 5

[Scroll down for answers to today's Bonus Bucks trivia questions.]

Welcome to Week 5.  As discussed on Friday, we're undertaking a new endeavor this week in an attempt to vault one of this site's readers into the top spot to walk away with those fancy watches.

We split up the participants into 4 groups, each of which received a different allocation of 4 stocks.

To recap, Friday's allocations were:

Group 1:  XIDE, RBS, LEH, AIG
Group 2:  CAL, LCC, DAL, SKYW
Group 3:  XIDE, BWS, VC, ICON
Group 4:  KWK, CHK, CLR, XTO

The selections are deliberately concentrated in specific sectors (respectively, financials, airlines, consumer goods, and oil and gas) to avoid the smoothing effects of diversification and they're deliberately focused on volatile (and when possible, negatively correlated) sectors.  Hopefully, at least one group will move significantly higher during Monday's session, but it should be noted that one group's upside will almost certainly be another's downside.

Specifically, with oil's record-setting one-day jump on Friday, there's a decent chance we'll see a follow through rally or a notable reversal.  Groups 2 and 4 (airlines and oil and gas) will therefore both likely incur big moves, and those moves will likely be in opposite directions.  Per our collaborative strategy, we're seeking to advance one group each day with a big enough move that 5 of them strung together will endow one lucky sub-sub-sub-subgroup with an unmatched weekly gain by Friday.

The downside (indeed an invited consequence) is that at least one subgroup should incur large downside moves each day.  But since only one player can win the weekly prize, second place and dead last are nearly equivalent, which is what makes this crowdsourced permutation game work.  And the good news is we (ideally) get to catch significant upside every day in a volatile market without having to guess the daily direction of the market (or oil prices, the dollar, interest rates, economic data, etc.).

Stop back in this afternoon around 2:00 pm, at which point we ought to know which of the 4 groups has performed the best, and the new set of subgroup picks (and subgroup segmentation methodology) will be posted.

Of course all participants are invited to adopt any and all of those picks for their portfolios, but it's particularly important that members of the winning subgroup come back for the new allocations, which will be similarly coordinated in pursuit of enabling one lucky reader to snatch those ritzy Swiss timepieces.

Update: Okay, barring any major afternoon disruptions, it's pretty clear at this point that Group 4 (the oil and gas group) is going to close out the day with the best performance - up 2.8% midway through the session.

Happily, Group 4 is by far our most densely populated group (a lot of October-December birthdays apparently), so we're moving a nice load of portfolios into Day 2 with that identical performance.

For today's reallocation (before 4 pm), members of Group 4 (and anyone else who so chooses, but especially Group 4) should first zero out all existing positions, then climb into the following picks, according to the last digit of their phone numbers:

• 0:  CXO, VQ, GDP, EAC
• 1:  LCC, CAL, AMR, SKYW
• 2:  LCC, CMGI, PLL, STEI
• 3:  CXO, CMGI, PLL, STEI
• 4:  CXO, VQ, CMGI, PLL
• 5:  CXO, VQ,  PLL, STEI
• 6:  CXO, VQ, CMGI, STEI
• 7:  LCC, CAL, CMGI, PLL
• 8:  LCC, CAL,  PLL, STEI
• 9:  LCC, CAL, CMGI, STEI

These represent a mix of oil stocks, airline stocks (paired, as noted previously, for their high volatility and negative correlation), and earnings reporters (CMGI, PLL, STEI) in various configurations.  (Hopefully phone numbers are somewhat more evenly distributed than birthdays.)

Important:  If you're using more than one portfolio for this project, kindly allocate the first portfolio according to the phone number scheme, the next portfolio to the allocation directly beneath it, and so on, until you've reallocated all involved portfolios.

For example: If you're in Group 4, your phone number ends with the a 5, and you're using 3 portfolios, your allocations would be:

• 5:  CXO, VQ, PLL, STEI
• 6:  CXO, VQ, CMGI, STEI
• 7:  LCC, CAL, CMGI, PLL

In all cases, each position should be set at 25%.

Below is your visual inspiration, from today's "Million Dollar Dish" e-mail update.

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations.  The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

---

See all related posts in the CNBC Portfolio Challenge archive:

• Week 5:  Monday,
• Week 4:  Monday, Tuesday, Wednesday, Thursday, Friday
• Week 3:  Monday, Tuesday, Wednesday, Thursday, Friday
• Week 2:  Monday, Tuesday, Wednesday, Thursday, Friday
• Week 1:  Monday, Tuesday, Wednesday, Thursday, Friday
• Week 0:  Pre-game

• A New Fly In the Ointment
• Currency Trading Resumes
• More Technical Difficulties
• Prize Poll
• The Airing Of Grievances
• Technical Difficulties, Orders Cancelled

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

---

Monday June 9th

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 Box:  "Question: According to the slideshow "Fallen Stars: Celebrity Foreclosures" how much did Aretha Franklin owe in back taxes?"

    Answer:  $19,193

Squawk On the Street:  "Question: In June 5's "Web Extra: Suspicious Stock" which Fast Money trader wanted to share his/her investment doubts?"

    Answer:  Guy Adami

The Call:  "Question: In the June 6 edition of CNBC.com's Kudlow Caucus, which panelist(s) predicted a recession?"

    Answer:  All of the above

Power Lunch: "Question: On Friday, Cramer warned that "safety stocks aren't safe" now. But he did say one stock was "about to rip." Which?"

    Answer:  Intrepid Potash

Street Signs: "Question: In "Riding the Energy Stock Elevator" why did Jerry Castellini say he likes Southwestern Energy?"

    Answer:  Shale development

Closing Bell: "Question: Find the CNBC.com Web video, "Farmer Meets Fast Money." Now: what state does farmer Roger Neshem hail from?"

    Answer:  North Dakota

Weekly Bonus Quiz:

Question: "Investors looking for stocks priced less than intrinsic value are referred to as ______ investors."

     Answer:  Value

Comments

CNBC Million Dollar Portfolio Challenge - Monday, Week 5

[Scroll down for answers to today's Bonus Bucks trivia questions.]

Welcome to Week 5.  As discussed on Friday, we're undertaking a new endeavor this week in an attempt to vault one of this site's readers into the top spot to walk away with those fancy watches.

We split up the participants into 4 groups, each of which received a different allocation of 4 stocks.

To recap, Friday's allocations were:

Group 1:  XIDE, RBS, LEH, AIG
Group 2:  CAL, LCC, DAL, SKYW
Group 3:  XIDE, BWS, VC, ICON
Group 4:  KWK, CHK, CLR, XTO

The selections are deliberately concentrated in specific sectors (respectively, financials, airlines, consumer goods, and oil and gas) to avoid the smoothing effects of diversification and they're deliberately focused on volatile (and when possible, negatively correlated) sectors.  Hopefully, at least one group will move significantly higher during Monday's session, but it should be noted that one group's upside will almost certainly be another's downside.

Specifically, with oil's record-setting one-day jump on Friday, there's a decent chance we'll see a follow through rally or a notable reversal.  Groups 2 and 4 (airlines and oil and gas) will therefore both likely incur big moves, and those moves will likely be in opposite directions.  Per our collaborative strategy, we're seeking to advance one group each day with a big enough move that 5 of them strung together will endow one lucky sub-sub-sub-subgroup with an unmatched weekly gain by Friday.

The downside (indeed an invited consequence) is that at least one subgroup should incur large downside moves each day.  But since only one player can win the weekly prize, second place and dead last are nearly equivalent, which is what makes this crowdsourced permutation game work.  And the good news is we (ideally) get to catch significant upside every day in a volatile market without having to guess the daily direction of the market (or oil prices, the dollar, interest rates, economic data, etc.).

Stop back in this afternoon around 2:00 pm, at which point we ought to know which of the 4 groups has performed the best, and the new set of subgroup picks (and subgroup segmentation methodology) will be posted.

Of course all participants are invited to adopt any and all of those picks for their portfolios, but it's particularly important that members of the winning subgroup come back for the new allocations, which will be similarly coordinated in pursuit of enabling one lucky reader to snatch those ritzy Swiss timepieces.

Update: Okay, barring any major afternoon disruptions, it's pretty clear at this point that Group 4 (the oil and gas group) is going to close out the day with the best performance - up 2.8% midway through the session.

Happily, Group 4 is by far our most densely populated group (a lot of October-December birthdays apparently), so we're moving a nice load of portfolios into Day 2 with that identical performance.

For today's reallocation (before 4 pm), members of Group 4 (and anyone else who so chooses, but especially Group 4) should first zero out all existing positions, then climb into the following picks, according to the last digit of their phone numbers:

• 0:  CXO, VQ, GDP, EAC
• 1:  LCC, CAL, AMR, SKYW
• 2:  LCC, CMGI, PLL, STEI
• 3:  CXO, CMGI, PLL, STEI
• 4:  CXO, VQ, CMGI, PLL
• 5:  CXO, VQ,  PLL, STEI
• 6:  CXO, VQ, CMGI, STEI
• 7:  LCC, CAL, CMGI, PLL
• 8:  LCC, CAL,  PLL, STEI
• 9:  LCC, CAL, CMGI, STEI

These represent a mix of oil stocks, airline stocks (paired, as noted previously, for their high volatility and negative correlation), and earnings reporters (CMGI, PLL, STEI) in various configurations.  (Hopefully phone numbers are somewhat more evenly distributed than birthdays.)

Important:  If you're using more than one portfolio for this project, kindly allocate the first portfolio according to the phone number scheme, the next portfolio to the allocation directly beneath it, and so on, until you've reallocated all involved portfolios.

For example: If you're in Group 4, your phone number ends with the a 5, and you're using 3 portfolios, your allocations would be:

• 5:  CXO, VQ, PLL, STEI
• 6:  CXO, VQ, CMGI, STEI
• 7:  LCC, CAL, CMGI, PLL

In all cases, each position should be set at 25%.

Below is your visual inspiration, from today's "Million Dollar Dish" e-mail update.

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations.  The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

---

See all related posts in the CNBC Portfolio Challenge archive:

• Week 5:  Monday,
• Week 4:  Monday, Tuesday, Wednesday, Thursday, Friday
• Week 3:  Monday, Tuesday, Wednesday, Thursday, Friday
• Week 2:  Monday, Tuesday, Wednesday, Thursday, Friday
• Week 1:  Monday, Tuesday, Wednesday, Thursday, Friday
• Week 0:  Pre-game

• A New Fly In the Ointment
• Currency Trading Resumes
• More Technical Difficulties
• Prize Poll
• The Airing Of Grievances
• Technical Difficulties, Orders Cancelled

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

---

Monday June 9th

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 Box:  "Question: According to the slideshow "Fallen Stars: Celebrity Foreclosures" how much did Aretha Franklin owe in back taxes?"

    Answer:  $19,193

Squawk On the Street:  "Question: In June 5's "Web Extra: Suspicious Stock" which Fast Money trader wanted to share his/her investment doubts?"

    Answer:  Guy Adami

The Call:  "Question: In the June 6 edition of CNBC.com's Kudlow Caucus, which panelist(s) predicted a recession?"

    Answer:  All of the above

Power Lunch: "Question: On Friday, Cramer warned that "safety stocks aren't safe" now. But he did say one stock was "about to rip." Which?"

    Answer:  Intrepid Potash

Street Signs: "Question: In "Riding the Energy Stock Elevator" why did Jerry Castellini say he likes Southwestern Energy?"

    Answer:  Shale development

Closing Bell: "Question: Find the CNBC.com Web video, "Farmer Meets Fast Money." Now: what state does farmer Roger Neshem hail from?"

    Answer:  North Dakota

Weekly Bonus Quiz:

Question: "Investors looking for stocks priced less than intrinsic value are referred to as ______ investors."

     Answer:  Value