Disclaimer: I am not a registered financial or investment advisor, and even if I was, I wouldn’t be your advisor. To you, I am nothing more than someone on the Internet posting anecdotes via a personal blog on his website. This content is intended for comedic and entertainment purposes only. Everyone’s sit­u­ation is uniquely different, so consult a certified professional if you need guidance on your own financial strategy.

 
Last year, my friend Doug Wreden and I decided to do a fun investing competition where we would both put US$10,000.00 into stocks of individual, publicly-listed companies and find out whose portfolio balance was higher after one calendar year.

Doug livestreamed the stock selection process on his Twitch channel on Friday, January 21, 2022, though it happened after markets closed at 4:00 PM EST / 1:00 PM PST, so the orders went through the morning of Monday, January 24, 2022. I had some prior commitments on the 21st so I wasn’t able to join in on the broadcast, which meant I picked my stocks by myself over the weekend, causing my orders to also go through on the 24th.

Yesterday, Monday, January 23, 2023, was the final trading day of the one-year challenge period. The results are now in.

I know many of you just want to see the results and don’t care about the analysis, so here is what you’re looking for. If you suffer from hexa­kosioi­hexe­kon­ta­hexa­phobia, proceed with caution.

(Apologies to those who are visually impaired and/or use screen readers; the content of those tables and charts is just too large and graphically-intensive to be able to reasonably translate into HTML. Hopefully the summary below helps you get a better idea of the information provided. All further tables on this page are hard-coded into the document.)

With my portfolio’s ending balance at $8,837.11 and Doug’s portfolio’s ending balance at $8,170.45, I am the winner of the competition by a margin of $666.66. Yes, this is real. No, I did not smudge or tweak the numbers to get that result. Feel free to validate all the numbers in the spreadsheet above.

As a reminder, my portfolio was designed not to win harder, but to lose slower (as opposed to Doug’s, which, whether or not he intended it, was de­signed to win harder at the cost of also losing harder). This strategy worked, as the overall markets did not have the best year in 2022.

My portfolio’s winners were NextEra Energy, Inc.; Waste Management, Inc.; and Walmart, Inc. My portfolio’s biggest losers were Digital Realty Trust, Inc. and, funny enough, Amazon.com, Inc. Amazon was my effort to “diversify” by adding in a wildcard company outside of my designated sector strategy (more on this later); if I had just committed to my strategy, my portfolio would have done even better.

On the other hand, Doug’s portfolio’s winners were Costco Wholesale Corp., Coca-Cola Co., and to some extent, PepsiCo, Inc. Doug’s portfolio’s biggest los­ers were Aspen Aerogels, Inc.; Intel Corp.; and Hasbro, Inc. Throughout a majority of the year-long challenge period, Netflix, Inc. was performing hor­ri­bly, but it was starting to pick back up recently; it’s unfortunate that the timing of the stock challenge was such that it didn’t have an opportunity to ful­ly recover.

Both of us lost to all of the benchmarks except for cryptocurrency. If I had invested everything into bonds, I would’ve made $37.50 more; if I had invested everything into the total domestic stock market, I would’ve made $277.84 more; and if I had invested everything into the total international stock market, I would’ve made $322.09 more. I was actually ahead of these benchmarks for a large part of the past year, but they passed me up right at the end. I think this serves as a good demonstration that, if you’re investing for the long haul, it is probably a good idea to just put your money into broad market index funds.

If it’s any consolation, we should be happy that we did not put all our money into cryptocurrency. The Grayscale Digital Large Cap Fund, which is com­posed (as of today) of Bitcoin, Ethereum, Solana, Polygon, and Cardano, fell almost 65% in value.

It is widely accepted that it is impossible to consistently and intentionally predict the stock market, and those who have managed to do so have just got­ten lucky. However, what isn’t impossible is to take current events into consideration and make broad generalizations about what is more likely to hap­pen in the stock market during that generalization period.

Last year, I made three major assumptions:

1. The first was a very specific assumption that the COVID-19 pandemic would go through more severe sinusoidal phases that would cause another market crash. This was simply incorrect, as the pandemic seems to have stabilized, the United States has mostly gone back to normal life, and most people have accepted SARS-CoV-2 as being a lingering virus that we will have to deal with long-term, just like how we already deal with the flu.
2. The second was a broad assumption that the stock market is more likely to fall than it is to rise, due to the fact that the economy is not ac­tu­al­ly as healthy as it might seem. This ended up being correct, inflation is indeed at a decades-long high, and we saw policy changes im­ple­mented by the Fed­er­al Reserve System (such as increased interest rates) to help mitigate.
3. The third was an assumption that the world will trend towards infrastructural development and the continued transition to push rapidly-evolving tech­nol­o­gy to the general public. As far as I am aware, there is nothing particularly iconic that happened in the past year with regards to this that rev­o­lu­tion­ized the way society works. However, this statement is also so excessively broad that it sounds like, a year ago, I might have worded it in­ten­tion­ally vaguely to make it so it was borderline impossible for my prediction to be wrong.

From there, I decided that, out of the market sectors defined by the Global Industry Classification Standard (GICS), I wanted to focus on consumer sta­ples, health care, utilities, and real estate. Were those indeed the best sectors? Here are the results:

*For the purposes of this table, I used Vanguard sector ETFs to gauge each sector’s performance. I selected Vanguard simply because I personally use it as my primary brokerage and I am most comfortable working with their offerings. There are many other options available, and the results may vary de­pend­ing on which one you pick.

Energy was a wildcard that spiked from the Russo-Ukrainian War and its escalation as a result of the 2022 Russian invasion of Ukraine. With that ex­clud­ed, it seemed like my predictions were generally correct—although real estate underperformed, the other three sectors I picked outperformed the to­tal stock market, and if I average out all four, I would be ahead of the total stock market by $543.97.

Remember, though, that my ten individual company picks did not beat the total stock market by that amount, or at all. That further emphasizes how much of a risk it can be to invest in individual companies instead of broad indexes, as well as how basing your investment decisions even on something as seemingly reliable as stock market sectors could still end up leading you astray.

Doug’s community is split in half into two teams based on the letter with which each person’s Twitch username begins—”A Crew” for the first half of the alphabet and “Z Crew” for the last half of the alphabet. As a mini-game between the two “crews,” Doug invested $500 into Coca-Cola to represent A Crew and $500 into Pepsi to represent Z Crew, and whichever stock ends with a higher balance would determine which crew wins.

Unfortunately, Doug made a common mistake of confusing Coca-Cola Bottling Co. Con­sol­i­dat­ed (COKE) with Coca-Cola Co. (KO), so he ended up investing A Crew’s $500 into the wrong company. I flagged this for Doug so he could fix his mistake, but not before he re­al­ized $26.07 in prof­its from COKE from the first trading day. Before I could make the prop­er cal­cu­la­tions to see how much of that gain should carry over, he put the en­tire $526.07 in­to KO.

Thus, the A Crew vs. Z Crew situation becomes a bit more complicated. Instead of just look­ing at Doug’s portfolio to see who won, we have to do some math to find out what his bal­ance of KO would have been had he invested the $500 properly from the beginning.

After performing that calculation using historical data and running a market simulation ag­ing that portfolio by one year, we have A Crew’s Coca-Cola Co. finishing with $502.25 and Z Crew’s PepsiCo, Inc. fin­ish­ing with $481.85, thus making A Crew the winner of the mini-game by a mar­gin of $20.40.

One of the stipulations of this challenge was that we would have to donate any earnings beyond our $10,000 cost basis to charity. Unfortunately, both of our portfolios lost money, so there were no profits this time around.

Another stipulation was that the loser of the challenge (i.e., the person with the lower portfolio balance) would have to do a punishment. If I were to lose to Doug and his Twitch chat, it was suggested that I would have to get a phrase of Twitch chat’s choosing laser engraved onto my Glock 19 pistol. I ac­tu­al­ly don’t recall explicitly agreeing to this, but thankfully, it doesn’t matter, because I won.

Doug’s punishment, on the other hand… was undecided. I imagine it is going to be determined through a voting process with Twitch chat during an up­com­ing live stream. I also trust that whatever is selected as his punishment is of comparable severity as me potentially having some random Twitch meme permanently immortalized on my duty weapon.

 
I had fun with this stock investing challenge, and I’m glad I was able to participate. I think many people just expected all along for me to win, but in reality, there were plenty of opportunities for Doug’s portfolio to come out ahead.

I’d be happy to participate in something like this again in the future. But until then? I’m sure you already know… I’m selling everything tomorrow and putting it in the S&P 500.

Disclaimer: I am not a registered investment advisor and do not have the qualifications to become one. Even if I was one, I would not be your investment advisor; to you, I am nothing more than a random guy on the Internet writing in his personal blog. This content is intended for comedic and en­ter­tain­ment purposes only. Everyone’s situation is uniquely different, so consult a certified professional if you need guidance with your own financial strat­e­gy.

 
A few days ago, my friend Doug Wreden, a broadcast personality who streams on Twitch and makes video content on YouTube, asked if I wanted to join in on a live event he was doing with his community where, together, they would invest $10,000 into the stock market. Unfortunately, I was overloaded with time-sensitive work that entire day and couldn’t join in live, but we decided to do the next best thing, which was for me to participate after-the-fact.

Thus, “Parkzer vs. DougDoug’s Twitch chat” was born.

 
Rules:

• Invest US$10,000.00 into ten individual companies (no index funds, mutual funds, ETFs, or bonds).
• No active trading is permitted after the initial purchase (though reinvesting dividends is allowed), and stocks must be held for one year.
• The winner is the team with the highest account balance after one year.
• Any profits beyond cost basis will be donated to charity.

 
Doug has very little investing experience (apart from purchasing Dogecoin as a joke and making a +800% return), so he relied on his community’s as­sis­tance to research companies and pick out the best stocks. Doug uses Robinhood as his brokerage, so that basically speaks for itself. On the other hand, investing and wealth management is one of my favorite hobbies, and I’ve taken it very seriously ever since my first paying job.

However, I knew I couldn’t let this make me get complacent. There are plenty of studies proving that even monkeys randomly throwing darts on a wall of stock ticker symbols can consistently beat investment advisors. Just because I’ve been doing this for longer doesn’t necessarily mean I am go­ing to perform better by default. I needed to es­tab­lish a plan.

 
First, I had to make some predictions and assumptions about what would happen in the coming year. Nobody can predict the future, but what I can do is use current events and cultural trends to make educated guesses. From there, I had to determine which sectors of the market are more and less likely to perform well in the given conditions. Next, I found some companies within those aforementioned sectors that I thought had potential for growth. Fi­nal­ly, I had to trim down my list to ten of my best candidates.

 
I made three major assumptions upon which I would base my investment decisions:

1. I think the coronavirus pandemic will continue through sinusoidal phases of getting better and worse throughout the year. Although the latest var­i­ant has not been as deadly, it has evolved to become far more contagious. We don’t know how it will mutate next, and with people getting com­pla­cent, this is a ripe opportunity for COVID-19 to cause great damage when we least expect it, resulting in a stock market crash.
2. I think it is more likely for the stock market to stabilize or fall than it is to rise in the coming year. I think the current state of the stock market is not as healthy as it may seem—it is only this high due to absurd inflation and government policy stimulating economic growth. Once things return to normal and people start repaying their COVID-19 disaster relief loans, money will be taken out of circulation and the stock market will revert back to what it “should” be.
3. I think the development and modernization of core systems will get faster. Technology companies did well the past few years, but it will still re­quire more work to roll out their advancements infrastructurally so it turns from a luxury into something more commonplace. In simpler terms, I think we have a lot of great concepts, prototypes, and first-generation innovations, but now is the time to keep pushing development so it can be used not only by the elite, but also by the general public.

 
With my grim outlook on the future of the stock market, it is clear that I would have to pick sectors that perform well during a recession. Out of the sec­tors defined under the Global Industry Classification Standard (GICS), I knew I wanted to focus on the following:

• Consumer staples. No matter how bad the economy, people still need to eat and use core household products. When people have less disposable in­come, they tend to shift their money away from consumer discretionary and into consumer staples.
• Healthcare. Just because the economy is bad doesn’t mean you’re not going to get sick. On top of that, we are still in the middle of a pandemic caused by a virus that is actively mutating. The healthcare industry is booming, ignoring the fact that that’s probably not the most sensitive way to describe people’s misfortune.
• Utilities. Similar to the above, people still use utilities during a recession, even if they might try to conserve spending and be more conscious of waste­fulness.
• Real estate. Again, as you might have guessed, people still need a place to live, even if the economy is bad. However, real estate also bundles in de­vel­op­ment projects, which ties in with the infrastructural advancements I mentioned above that I think will happen.

 
I picked three well-established, reputable companies from each of the sectors above, plus three companies from the remaining sectors not listed above. From there, I took the list of 15 and narrowed it down to 10.

Here are my ten stocks picks with the amount of money I allocated to each company, alongside Doug and his community’s stock picks and their al­lo­ca­tions:

*The $1000 for Doug’s final stock selection is split evenly between Coca-Cola and Pepsi as a mini-game between “A Crew” and “Z Crew,” two halves of Doug’s Twitch chat community split by the first letter of their username, to see which brand (and consequently, which crew) has a higher return on in­vestment.

From these stock picks, I think it becomes fairly clear that my portfolio was built not to grow faster, but to decline slower. Thus, if the economy con­tin­ues to do well, Doug’s portfolio will defeat mine, but the economy slows down, my portfolio’s balance will conclude the year higher.

 
I’ve loaded all of our stock picks into some portfolio analysis software, and I might do quarterly (or even monthly, depending on level of interest) re­ports on the performance of our portfolios, showing who is in the process of winning. At the very least, I’ll be providing some statistics, charts, and tables for Doug to be able to review on his live stream.

Seeing as this is ultimately going to be for charity, I wish great success for Doug and his Twitch chat… with the caveat that his portfolio yields 1¢ less profit than mine. GL

It’s been a week since we started this little competition, so I decided to go back and edit this blog post to add in some bonus content in the form of charts and a graph.

First, one thing to note is that, if you’re attentive to the numbers, you’ll notice that Doug’s cost basis is not a flat $10,000.00. This is because, when he was picking out stocks on his Twitch stream, he intended to invest $500 in Coca-Cola (as in, the competitor to Pepsi), but instead, he accidentally invested it into the Coca-Cola Bottling Co. Consolidated. This happened because the bottling company’s ticker symbol is COKE, while the Coca-Cola Company’s ticker symbol is KO; Doug and his Twitch chat got those two mixed up.

After I informed Doug of this error, he sold all his shares of COKE and realized $26 in profit, then put all $526 into KO. I was not aware that he was going to do this, otherwise I would have advised him to only put $500.04 back into KO, because that would’ve been the equivalent return on investment from KO from that time period. Thus, because of the transaction, Doug’s numbers are going to be a little bit off.

Hopefully the final results won’t come down to $26, but if our portfolios are indeed within $26 of each other at the end of one year when we determine the winner, we’re going to need to do a bit of math to see how much this affected Doug’s earnings.

After five market days, this is how our portfolios are looking right now:

For comparison, if we had invested the $10,000 into the S&P 500 instead, it would have grown to $10,230—$97 higher than my portfolio, and $363 higher than Doug’s.

Here is a graph of the price change of each of our portfolios, alongside the chart for the S&P 500. Keep in mind that these are by percentage, and are relative values, so this might not be the most intuitive graph. I ideally would have wanted to graph the total value of each of our portfolios over time in dollar amounts, but it seems like that is not a feature offered by my portfolio tracking and analysis software.