The SINLetter.com Stock Contest

SINLetter.com, one of the more prominent online free stock newsletter sites announced a three-month stock-picking contest. Contestants get to pick three stocks on the long or short side and the winner will be announced at the end of three months. We were invited to participate and these are our picks:

Stock Symbol	Position	Comments
LDK	Long	Chinese wafer manufacturer growing at over 100% for the foreseeable future, but the growth and margin improvement potential are yet to be reflected in the valuation.
FNM	Long	A moderate-risk investment in the financial sector with exposure to the mortgage-meltdown.
GROW	Long	Manages mutual funds focused in the emerging market and commodity sectors. The stock is down significantly despite the fact that its funds performed well.

As it is a short-term (3 months) contest, the spirit of our selections is based on the guess that chances of winning will be higher if one chooses high-risk high-reward type of stocks. We had a very rough first day, as our selections settled well below the highs of the day. As per the contest rules, the returns for the first day is calculated from the highest price for the day for long picks and that resulted in all of our picks showing sizeable losses for the day.

Our opinion on stock contests in general is that they are unpredictable, but it is a fun educational experience.