CNBC, the financial channel, is running a stock trading contest with a million dollars as the prize. It begins with a 10-week contest with over 250,000 contestants so far, followed by a 2-week finals period with 20 finalists, who start anew with no carry-over of profits from the 10-week "regular season." Trades in a fictional investment portfolio of $1,000,000 may be logged online at any time, though the fictional trades are entered only at the closing price at the end of every trading day. During the regular season, each weekly percentage winner receives a $10,000 prize and a place in the finals. The other 10 places in the finals go to the top 10 leaders for the overall regular season. The winner of the 2-week finals wins $1,000,000 payable as an annuity. If you are interested, you may still enter.
Unfortunately, CNBC's site had major problems on Thursday, with trading staggering slow and often failing in the morning and completely impossible for much of Thursday afternoon. Friday, there was a total meltdown: for at least the last three hours of trading on Friday, the site was up, but the portfolios were empty, which made it impossible to enter Buy or Sell orders to be executed on market close on Friday. One can see some of the frustration from players here, here, here, here, here, and particularly here.
On both Thursday and Friday, customer service responded with form letters, and on Friday afternoon, responded with false information that the site was fixed and working. As for liability for Thursday's problems and Friday's meltdown, the contest rules contain not only a general waiver, but a more specific refusal to guarantee access.
At CNBC's Friday evening wrap-up show covering the first week of the contest, if the site's meltdown was mentioned, I missed it. Now this week Mark Koba is blogging on the contest at CNBC. Comments are not allowed, and even to read the blog requires registration.
Corporate bloggers face a particularly tough challenge: to appear pretty honest while usually spinning the facts in favor of the corporate entity who pays one's salary. One possible use of such a CNBC blog would be as a lightening rod for criticism, diverting harmful power surges away from the network's shows, which can then pretend that there are no problems. And, of course, a corporate blogger also has access to people in the loop whom other mortals do not, which can be great for getting answers to nagging questions.
So far on Monday, the first day of the blog, Koba has filed 12 blog posts. None mentions the trading problems last week. In two posts, Koba did address another common complaint, that the first week's winner had multiple accounts—over 800 of them, in fact.
Well--the first week of the Million Dollar Portfolio challenge is over--so let's see where we stand. Nancy Beaumont sits on top of the leader board with a portfolio value of $1,645,296.56 or a weekly gain of 64.5%. Nancy has multiple portfolios registered for the contest, and she holds the top 3 spots in our list, with a total of 10 portfolios within the top 25, and they are markedly similar.
Of interest is that Nancy's top 3 portfolios are currently all in cash. She had no pending buy orders as of Friday and she always max's out on bonus bucks, and not all leaders have. . . .
All in all a pretty good week for the contest. The theme seems to be mostly short term buys and big ones at that. We'll see how that strategy plays over the next week. By the way--there are now 264,000 registered contestants.
With the Friday meltdown, I don't think it's reasonable for Koba to write: "All in all a pretty good week for the contest." This was a problem that undoubtedly ruined the contest for many players. Given that CNBC ran the contest last year, and did very vigorous advertising of it this year, I find it hard to believe that the amount of traffic to the site was much beyond reasonable expectations.
As to multiple entries, the contest rules do not state that a person can have only one account, so having multiple accounts is completely allowed. But did Beaumont actually set up over 800 email accounts, one for each trading account? Since one's purported email account is used as the login, it would appear that one either must have 800 accounts or must give phony email addresses on his or her application form. It appears that CNBC's "member center" allows one to change an email account even now, so it would be easy for someone to change to a working email address on one's best performing portfolios after the contest has started.
The contest rules do not say whether one can be disqualified for submitting false information on registration. Even if it might be true that one could be DQd for that, one might argue that giving a false email address would be only a de minimis violation, which should be ignored. By the way, I personally do not think that it is even morally wrong to submit a false email address if one does not intend to claim any prizes (assuming one has any plausible reason at all), though I can imagine that others might disagree.
In any event, there are some questions that I'd like to see answered on the blog or in the rather phony set of FAQs on the website.
Inquiring minds want to know:
1. If one submits a false name or email address, would that disqualify someone from any prizes on that trading account?
2. Why not publish the portfolio sizes or returns on the leaders and each decile of contestants? If they won't publish this on the official pages, perhaps Koba would publish this on his blog. It's hard to tell how far behind making the finals we are, when once a week, they tell us only the total portfolio for the leader.
2. Was everyone unable to trade, or just some contestants, Friday afternoon and for substantial parts of Thursday?
3. Since one can obtain additional trading money by answering questions, were bonus dollars added for questions answered correctly during the period that the site was not showing portfolios? I think not, unless a comntestant later emailed to tell them that you answered the questions correctly.
In case you are curious, I am currently in the top 2%, with my account up 9.5% in 5 days of trading, though almost all of this was in the first three days when the site was working properly. If I had been able to trade freely on Thursday and Friday afternoon, I would be up another 5%, which would still leave me way behind the leaders, who were up a staggering 64.5% just last week.