Unfortunately for them, none of the money was real.
University of Otago finance students Shenjian Li, Mingxuan Yu and accountancy student Junxiu Lyu ranked first in both New Zealand and Australia at the Bloomberg Global Trading Challenge 2024 recently.
The challenge, held over five weeks in October and November last year, involved beating the market benchmark relative to the Bloomberg World Large, Mid & Small Cap Price Return (WLS) Index by generating a return that outperformed the market average.
Each team was given $US1 million worth of fake capital to invest during the United States earning season — with real events affecting their data and market information in real time.
The team’s final figure was $US101,110 — beating the market by a 10% return over the five-week period, or approximately 162% on top of what the market would have earned per annum.
Mr Yu said the result was exciting and their team deserved it.
During the build-up to the US election, a lot of stocks they had not anticipated “surged”.
The team could not make emotional decisions during trading and had to stick to their plan, which added a little bit of pressure, he said.
The different time zone also posed a challenge, with the trio getting up “very early” to monitor the markets before trading time ended — which was at 9am in New Zealand.
But if they could do it with fake money, “I think probably we can do it with the real money”, Mr Yu said.
The amount placed the team in the top 11% of the 2453 teams around the world, from 383 universities across 46 different countries, who competed in the challenge.
But Mr Li believed they could have cracked the top 10% were it not for a $27,000 loss on a single stock in the last day of trading.
Ms Lyu said the challenge was quite close to real-life investment, which could also be stressful.
“If it’s real world money then definitely no-one wants to lose it.
“We just used the fake money to invest, but we already feel very stressful.
“So, for myself, I won’t do that in the real world.”
University of Otago senior lecturer in finance Dr Olena Onishchenko, who mentored the team, said it was a “very risky” way to make money or make a living, and was not recommended for any investor without deep knowledge of the markets and how they worked.
She had always believed in her students and was “very happy” they had managed to beat the market which was a goal every finance professional aspired to, she said.
tim.scott@odt.co.nz
