Kiddar Capital analysts David Wiesenfeld and Philipp Barminov have been presented with the ultimate challenge: make money.
Each analyst is allocated $10,000 to strategically invest in the stock market over the next 60 days. “As long as it’s within the account, it’s your domain,” Todd Hitt, founder of Kiddar Capital, told the analysts at the contest kickoff. “I believe in independence.”
The analyst that has the highest return will not only win bragging rights, but will also receive 25% of the total earnings of both competitors.
Let the games begin!
David is going for gold, putting 100% of his funds into PowerShares DB Gold Double Long ETN. “Gold is a strong buy in times of uncertainty as a universal currency,” he explains.
Philipp is betting on the cloud with positive earning calls for Wal-Mart and Cisco. “Parents seem to feel confident about the economy, and it’s back-to-school season for Wal-Mart,” he says, “and Cisco is focusing on IoT, which should pay off soon.”
This might be a competition, but the economics are just like any other deal. At the end of the 60-day period, the winning analyst gets a winner’s cut of 25%; Todd Hitt gets back his capital; and the remaining 75% of the profits are put in a pool for the rest of the Kiddar Team.
Who will win? Check back here for weekly updates on the #Kiddar10K.
8.23.16 :: Week 1 Recap
Things aren’t looking good for our #Kiddar10K competitors. With stocks waning across the board, both of their investments are in the red and cynics are wondering if the “Kiddar 10K” is becoming more of a “Kiddar 5K.”
Philipp may be in the lead, but it’s bittersweet given the performance of both their portfolios: David’s is $228.82 in the hole, and Philipp’s is down $103.59. They have attributed the dip in performance to uncertainty leading into the Federal Reserve meeting in Wyoming on August 26.
Philipp’s initial earnings calls for both Cisco and Walmart were good. He believes that Cisco’s stock dropped because they decided to layoff 7% of their workforce. In addition to the Federal Reserve meeting, Walmart might have overpaid for its new acquisition of Jet.com.
David summed up the week acutely: “We’re losing money.”
Despite setbacks, both analysts are optimistic.
“I feel good,” David says. “It’s unclear if recent market growth is due to the actual strengthening of economic conditions or the cyclical nature of the market. Uncertainty will continue to increase, so I expect gold to go up in the next 45-days.” He is prepared to shift strategy if needed, and may replace some of his gold portfolio with high-risk, high-return investments.
Philipp stands by his investments in Cisco and Walmart. “The layoffs will allow Cisco to invest more in IoT and the cloud — so the drop will be short-term — and Walmart’s acquisition of Jet.com is ultimately a good strategy for competing with Amazon,” he says.
Will gold make a comeback? What will happen at the Federal Reserve meeting? Stay tuned for the Week 2 update on 8/30/16 of the #Kiddar10K.
8.30.16 :: Week 2 Recap
Both our competitors are breathing in dirty air*, though much more so for one than the other: while Philipp’s portfolio has clawed its way back to a loss of only $86.46, David is coming off a heartbreaking loss of $672.91.
The week’s results may be due to Janet L. Yellen’s speech at the Federal Reserve meeting last Friday, which boosted the probability of a rate hike in September. The economy is doing well — which is good news for Philipp, and bad news for David’s play on an unstable economy.
David is taking a much-needed pit stop in Martha’s Vineyard to recover, but he does want his fans to know that he’s going to come out swinging: “I’m still optimistic gold will move favorably over the next month,” he says, though he plans on trading later this week to mitigate losses.
Philipp remains confident in his investments in Cisco, Amazon, and Walmart. Amazon just unveiled a new platform where customers can search for cars and car parts, and Walmart’s entry into online selling should also yield results. Walmart certainly won’t surpass Amazon’s e-commerce in the near future, “but no one can complain about being #2 in a $400B industry,” he says.
Of course, the only statistic that matters is the final score. There’s a possibility that a rate hike won’t occur, and Friday’s job report from the Department of Labor could either confirm or contradict the results of last week. The #Kiddar10K is still anyone’s race.
Will gold prove to be David’s Hail Mary? Will Philipp’s portfolio take him to the finish line? Check back here for the Week 3 update on 9/6/16 of the #Kiddar10K.
*(See: Wikipedia’ Glossary of motorsport terms.)
9.6.16 :: Week 3 Recap
The VTI is down due to a weak jobs report last week, but our Kiddar Capital analysts are playing strong. Philipp has really hit his stride; with his portfolio down only $16.17, he is almost making a profit — but David refuses to accept defeat. In an effort to turn this game around, he has sold half his stake in gold double-long for a $200 loss and reinvested in Barclays Bank, kicking off the week $399.70 in the red.
Gold has rebounded somewhat, and David has high expectations for Barclays. “It’s a stable company with a strong dividend yield, and has started to sell off some of its least profitable businesses,” he says. “I bought it because the market overreacted to Brexit. It’s trading at close to its 52-week low right now, and I expect a return to pre-Brexit prices.”
Philipp brings news of an exciting play by Amazon: they’re going to start competing with FedEx for their own shipping, and have leased planes from Air Transport Services Group and Atlas Air. Meanwhile, Walmart is cutting office jobs to increase floor staff, an important move as the holiday season approaches (yes, already).
Although Cisco has been performing well, Philipp is considering a trade for more volatile — and hopefully more profitable — investments. “I am in the lead, so I have room to take risks,” he explains.
These past couple weeks of the #Kiddar10K have taught us that no lead is safe. Both our analysts are playing at a high level, and there’s no telling what will happen next.
Will Philipp go for the long throw and sell Cisco? Will David’s investment in Barclays bring him back into contention? Check back here for the Week 4 update on 9/13/16 of the #Kiddar10K.
9.13.16 :: Week 4 Recap
Both our analysts are excited to be at TechCrunch Disrupt in San Francisco this week — and it’s a good thing they’re able to get away, because their portfolios are performing like the 2008 Detroit Lions. David is down $653.94, and Philipp has plunged from near-breakeven to $549.32 in the red.
Confusion about whether the Federal Reserve will raise rates has hurt both portfolios, causing “the entire market to have its worst day since Brexit,” Philipp says. David points to the possibility of an interest rate raise as a detriment to his gold stock, but has no plans to field a substitute.
Philipp has sold Cisco for a small profit, deciding that its growth potential was too far in the future to help him with the short-term #Kiddar10K. He replaced it with AMD stock the day before the Apple and Sony presentations, based on the rumor that Sony was going to start using AMD chips in their products. The plan backfired when AMD decided to cover its debt by issuing more equity, diluting current owners’ shares. Ouch.
Of course, stranger things have happened than stock-market bounce backs. It ain’t over till it’s over — so stay tuned.
Will either of our brave yet floundering contestants manage a comeback? Check back here for the Week 5 update on 9/20/16 of the #Kiddar10K.
9.20.16 :: Week 5 Recap
David and Philipp have returned from San Francisco, where they assisted in making our $25,000 #KCDisrupt investment in Mobalytics as the most innovative startup at TechCrunch Disrupt (in our opinion).
Unfortunately, they arrived back to week 5 results of the #Kiddar10K that haven’t changed drastically from previous weeks. David has dropped further, reflecting a week 5 loss of $898.99 and Philipp has managed to slightly reduce his losses to -$335.14.
Philipp is optimistic, and sticking to his game plan. “The markets are recovering from a huge drop,” he says. “AMD is returning to previous levels as analysts give it a positive rating, and Amazon’s Echo is driving the company’s stock up. By some estimates, it could soon exceed $1,000 per share.”
Meanwhile, David is looking to turn up the heat. “I may be looking to buy a third stock in the beverage industry,” he says. It’s a bold move, but both analysts are going to have to take a risk soon if either of them plan to get out of this hole.
Will David’s beverage bet take his portfolio up a notch? Will Philipp’s Amazon take him to profitability? Check back here for the Week 6 update on 9/27/16 of the #Kiddar10K.
9.27.16 :: Week 6 Recap
The #Kiddar10K is rapidly coming to a close, with Monday, October 10 marking the finish line. It has been 42 days, and neither analyst has managed break even for more than a few hours.
David is leaving Week 6 better than he left Week 5, but he is still down an abysmal $835.41. Philipp’s luck has also improved, with his portfolio sustaining a loss of only $177.62.
However, no one is actually WINNING. If neither analyst makes money by October 10, both will lose.
David is still confident that gold is on the upswing. “I think DGP bottomed out last week,” he says. “This week, we should see the price rise above $28.” (As of today, DGP’s price per share is $27.26.) He has not yet committed on whether he wants to invest in a beverage company leading into the final stretch. (A bit of advice, David — a quarterback who hesitates too long gets sacked.)
Philipp plans to keep his current lineup going into the playoffs. “Amazon’s stock is up because JP Morgan raised its price target, and AMD is up because analysts are optimistic about the chip industry,” he says.
He also adds that “markets are up across the board because Hillary won last night’s debate.”
Our analysts have less than two weeks before the clock runs out. The pressure is officially on!
Will either of our analysts manage to break even? Will one of them end up with money in their pocket, or will October 10 send them both to the Hall of Shame? Check back on 10/3/2016 for the #Kiddar10K Week 7 update — the last recap before the winner (or lack thereof) is announced!
10.4.16 :: THE FINAL COUNTDOWN!
Our analysts have moved into the home stretch of the #Kiddar10K, and neither David and Philipp is standing on solid ground. We will announce on Tuesday, October 18 whether the #Kiddar10K has a winner.
Philipp has managed to catch his second wind, and is only $1.51 away from breaking even! His Amazon stock skyrocketed with the announcement of Twitch Prime alongside the company’s decision to take over their own shipping.
David is flagging in this last leg, his portfolio sustaining a loss of $929.34. “It’s a good thing I have a wonderful personality,” he says.
However, Philipp Barminov won’t necessarily win this race. If neither analyst makes a profit on their investments, there is no winner. With so little time left in the #Kiddar10K, Philipp sold Amazon to lock in his gains — but without Amazon in his portfolio, it’s still up in the air whether he’ll break even.
It’s been a long, hard road for David and Philipp. Only the next 6 days will tell if one of them will come out on top.
Will either of our analysts manage to turn a profit? Or will the #Kiddar10K, after all the blood, sweat, and tears, end with NO WINNER? Check back next week on on 10/18/16 for the FINAL RESULT OF THE #KIDDAR10K!
#KIDDAR10K :: THE FINAL SCORE
Looks like a DOUBLE KO for the NYSE! David “Weezy” Wiesenfeld and Philipp “Comrade” Barminov leave defeated.
When we left you after our last update, it looked as though there might be a winner in the #Kiddar10K! David’s portfolio was holding at a loss of $929.34 — but Philipp’s was only about $2 down, which gave us some hope that he could break even and claim victory!
With the final day approaching and his portfolio still in the red, Philipp had nothing to lose. Using his earnings from selling off Amazon in Week 7, he purchased stock in aluminum company Alcoa. Philipp had studied Alcoa as a student at UVA, so he knew their business model. Their earnings call was coming up, and it was his last shot at making a profit.
However, the earnings call fell short. Alcoa dropped like a lead balloon.
Unfortunately, neither of our analysts managed to win the #Kiddar10K.
The final score? See below.
Everyone in the office is saddened by the result. If the analysts had earned money, part of that would have been put in a pool for the office’s use.
“There goes our holiday party,” says Todd Hitt.
“I guess this means no more office snacks,” Cheryl Foil adds.
While both our analysts limp defeated back to the locker room, they stopped to talk to me about what they’ve learned and what they would have done differently.
“If I could do it again, I would have implemented a more diversified strategy aiming for more conservative, smaller returns,” says David, who played the #Kiddar10k with a narrow portfolio. “I also confirmed my belief that it’s very difficult to see significant positive returns in the stock market over a short period of time.”
With the benefit of hindsight, Philipp knows that his original plan of investing in Nvidia and Alibaba would have paid off handsomely.
“I wasn’t able to invest in stocks I really believed in because of the delay in processing,” he says. “If it was my decision, I would have waited until the next earnings season. We ended up investing right after the earnings period, so there were a lot of fluctuations. We were late to the party.”
Philipp also notes that, while he mitigated his losses through a diversified portfolio, diversification itself comes with a price: “On a smaller investment amount, transaction fees really penalize the diversified portfolio. You are incentivized to invest in a single stock to minimize your transaction fees,” he says. “Next time, I would invest through services that don’t take transaction fees — like Robinhood, which I use to invest my personal money.”
If given another chance at the #Kiddar10K, both analysts say that they would be able to make money on round two. “That’s because we’re both confident, though,” David says. “It’s totally possible that we would lose money again.”
So if nothing else, our analysts have learned just how tricky the stock game can be.
This is K.J. Darling, your #Kiddar10K announcer, signing off.