Waitress appears to be winner of CNBC stock contest
Tim Catts of BusinessWeek writes that an Ohio waitress named Mary Sue Williams appears to be the likely winner of the scandal-plagued CNBC stock picking contest that drew hundreds of thousands to its web site but likely tainted its image.
Catts wrote, “According to the last official standings, posted on May 25, she was in sixth place, with a 29% return during the two-week final round. But as BusinessWeek first reported, a handful of top finishers are suspected of exploiting a loophole in CNBC’s trading software to inflate their returns (see BusinessWeek.com, 6/7/07, “CNBC’s Easy Money”). CNBC later acknowledged the problems and said it will disqualify contestants who violated any of the game’s rules. Based on BusinessWeek‘s analysis of the trading results for the contest’s finalists, Williams appears to be the most likely winner.
“It would be a fairy-tale ending for a contest wrought with drama and controversy. Williams, 46, has been a waitress for 20 years and was a welder before that. She has never bought or sold a real stock in her life. In fact, she says she never even paid much attention to the markets before signing up for the challenge. Yet Williams has already bested thousands of financial professionals who entered the contest with Ivy League degrees and complex trading models. ‘Part of this was luck,’ she says. ‘A lot of it was a gut feeling, some eenie-meenie-minie-moe, and common sense.’
“A victory for the little guy? Well, yes. But it’s also sign of what Paul Auster once called the ‘music of chance.’ Picking stocks is about luck as much as strategy. In a field of 375,000 contestants with 1.6 million portfolios, someone has to finish first. Lubos Pastor, a finance professor at the University of Chicago’s Graduate School of Business, says that in a contest like CNBC’s, with a short time horizon, there’s no reason that the pros should have any advantage over novices armed with smart strategies and good fortune.”
Read more here.