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April 24, 1993
Wall Street wannabes test their stock instincts
Cal student increases his hypothetical portfolio 47 percent in national investment contest
By Louise Lee
It was only a game, but Dylan Cornelius played it like a pro.
A psychology major at UC Berkeley, Cornelius finished first at Berkeley and third in the state in this year’s AT&T Collegiate Investment Challenge, a national stock trading contest.
Over the four months of competition, Cornelius increased his hypothetic stock portfolio worth $500,000 by 46.5 percent to $732,793.80. By contrast, the Dow Jones Industrial Average increased 4.47 percent over the same period.
Cornelius, 23, was one of 34 UC Berkeley students who participate in this year’s contest. Largely Wall Street wannabes, participants “buy” and “sell” stocks, starting with a $500,000 cash portfolio. They can act like the pros, getting up-to-the-second quotations for stocks on the New York Stock Exchange, American Stock Exchange and NASDAQ and “paying” commissions and trading fees just like those in the real world.
It’s play money, but it’s serious
The only thing missing is the stress of moving real money, said Randy Parkman, promotions director for Replica Corp., the Dedham, Mass, organization that manages the contest.
Although it’s just a game, many of the 15,000 high school and college students nationwide took it seriously to the bitter end, and stuck it out from Nov. 2 to Feb. 26. They endured a host of volatile market conditions, including the presidential transition and some record market trading levels.
Contest rules are designed to teach participants some of the realities of trading. For instance, participants are limited to 50 trades and cannot buy more than $200,000 worth of any single stock.
“We don’t want participants to go on a shopping spree,” said Parkman.
So how did Cornelius do it?
He picked up suggestions from the business press as well as from his fraternity brothers and friends. Mainstays of his portfolio were The Gap, Chrysler, Electronic Arts and Union Carbide.
He stayed away from biotechnology stocks, which have taken a beating since the Clinton administration’s move to reform the health care system.
He’s got the biotech blues
Joseph Kim wasn’t so wise.
“I made a bad guess on biotech,” said Kim, 21, a business major at UC Berkeley. Kim ended the competition down by $282,738.94, putting him almost in last place among the 8,300 students who participated nationwide.
But he isn’t upset about the outcome. “I was just playing around this year,” he said.
Nevertheless, he’s learned much about the market. “Never try to make too much money in too short a time,” Kim said.
Both Kim and Cornelius hope participating in the contest will help them land jobs on Wall Street. After all, that has happened before, according to Pat Riegg, career adviser for business and economics students at UC Berkeley. She said one former student was sure the contest had a lot to do with this getting a job at a major brokerage house.
“All the skills fused during the contest are transferable,” said Riegg. “The company figures if you did well, and you have the enthusiasm for this, maybe you’ve found your match.”