Thursday, March 5th, 2015

ASX Sharemarket Game

Twice a year the Australian Stock Exchange runs a game to help people learn about how the sharemarket works. They have been running this for several years but I only found out about it in the middle of last year. In the game each player is given $50000 in game money to spend on shares. Broking is $20 and all of the trades in the game are at real market prices and are marched to real trades on the real market.

In the second game that they ran last year I decided to take part. I had several “so called” financial experts recommend ing various shares to me as a part of their efforts to get me to pay for their newsletter where they would then make regular further recommendations. I decided to see how effective their free advise actually was by using the sharemarket game to see what would happen if I were to buy the shares they were telling me were their supposedly top recommendations. Each game runs for three months and with these highly recommended shares as my portfolio for the game using a “buy and hold” strategy (as I am interested in investing and not in trading) these shares placed me somewhere well down in the lower half of the placings when the final results were announced. Obviously their recommendations were for the most part not such a good buy after all – at least if you were not looking to invest rather than trade.

The first game for this year started exactly five days ago (at the time of my writing this) and this time I decided to try a different strategy. This time I selected six listed companies myself and on day one of the game purchased quantities of these using almost all of the allocated game money. The idea is to see how the shares I picked end up at the end of the game when compared to how those recommended to me by supposed financial experts ended up. At the end of day one I was ranked somewhere toward the middle which doesn’t exactly mean much. What was really surprising was the end of day two results that put me in position 83 and meant that I was listed on the top 100 leaderboard for the game. Now I had never expected to ever make the leaderboard but figured that I I was ever going to do so that the time this had happened was the most likely time for it as there hadn’t been enough time yet for those with really good trading strategies to start to move ahead of the rest of the pack. Another surprise awaited me on day three though as I discovered that I had moved up the leaderboard to position 55. Then things started to get really crazy when my position on day four jumped to 9. Now with five days gone I find myself listed not only on the top 100 leaderboard but in the top five on the dashboard as my position has now gone up to 4 out of the 10461 players currently ranked in the game. After a week of constantly increasing my rank it is obvious that the strategy I am using will soon see me drop off the leaderboard as those who knows what they are doing (or is lucky) with active trading start to move ahead. The most ridiculous thing I can imagine happening would be if I continue to improve my rank today using my hold strategy.

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