A COMPARISON OF PORTFOLIO PERFORMANCES OF THE RANDOM AND STRATEGIC STOCK SELECTION STRATEGIES: THE HAMPTON ROADS STOCK PICKING CONTEST

Sid Howard Credle, Sharad Maheshwari and Edward Pyatt

The International Journal of Business and Finance Research, 2007, vol. 1, issue 1, 38-47

Abstract: In this paper the performance of the random and the strategic stock selection approaches are compared and tested to determine which results in the greater level of returns to a portfolio of stocks of Virginia based companies. The analysis is conducted via a stock picking contest developed by a local daily newspaper in the Hampton Roads area and hosted by a local university business school. The contest included 1,225 entries, in which contestants chose five stocks from Virginia-based companies. The portfolio return performance of contestants was observed over a 12 week period and the contestant receiving the greatest hypothetical returns over the contest period received a $1,000 US savings bond. The stocks selected by contestants were classified into two aggregated portfolios, indicating whether a random, or a technical/strategic method, was used to pick stock portfolios. A comparison of the two aggregated portfolios indicated that the technical/ strategic selection group out-performed the random walk selection group. In 10 of 12 weeks of the contest the researchers observed a statistically significant difference in the returns of these portfolios. It was also observed that the strategic group out-performed the selected population of Virginia based companies. None of the aggregated average returns from the random or the strategic selection group portfolios out-performed the Standard & Poors 500 Average during the contest.

Date: 2007
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v1n1-2007/IJBFR-V1N1-2007-4.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ibf:ijbfre:v:1:y:2007:i:1:p:38-47

Access Statistics for this article

The International Journal of Business and Finance Research is currently edited by Terrance Jalbert

More articles in The International Journal of Business and Finance Research from The Institute for Business and Finance Research
Bibliographic data for series maintained by Mercedes Jalbert ( this e-mail address is bad, please contact ).