If You Can't Win--Cheat?

[JPatrick]

I've been toiling for several weeks now trying to make a go of the CNBC portfolio challenge. You manage up to five portfolios for X number of weeks with the winner getting a million bucks and along the way chances for other big time goodies.
So I started with 5 portfolios, each with a different theme. Trying to work these in a very aggressive manner along with the real live portfolios I manage full time, quickly consumed me and I dropped to one contest portfolio. I've put lots of time and research into this mainly for the practice, assuming I could never win. Over for the most part I've remained in the 99th percentile, not good enough to win, but still a motivating factor.
So this AM I received email from CNBC. If you've been in the contest, I assume you will soon get the same email..
CNBC Email:>Trading in CNBC's Million Dollar Portfolio Challenge was suspended as of close of trading today at 4:00 p.m. ET for one week.

It came to our attention that there was a technical glitch in the current equity trading system, which a handful of players found and exploited to jump to the top of the leaderboard. The contest accidentally allowed what our rules specifically prohibited.

Out of fairness to all registered contestants and as is our right, according to the rules of the contest, we are suspending the contest and will restart it Sunday, October 30 at 5:00 p.m. ET. Upon relaunch, all player accounts will be reset to their opening balance. Play will begin anew for the final five weeks of the contest. All winners from the first five weeks, including this week, will retain their prizes.

We apologize for any inconvenience, but fundamental fairness compels us to take this action.>End of Email

Makes me wonder, minus the cheaters where would I have been...nahhhh.

 

[arebelspy]

That's unfortunate.. Too bad they couldn't just detect the cheaters, suspend their accounts, and let the rest stand. Well done anyways.

 

[rescueme]

Actually, I have a problem of the term "cheat" vs. "opportunity".

The "players" recognized a valid opportunity in the trading scenario, and they took advantage of it (unlike those of lesser thought processes).

It's not the problem of the "players", but of those running the constant (somewhat like real life). If those that were "running" the contest screwed up, is that the responsibility of the participants to correct the basis of the constest?

For me, it's a bit like real life investment/trading. You identify the risks, you identity the opportunity, and you make your bet (place your trade). If the participants recognized a problem in the base scerenio, than they are a bit more intelligent than those creating/managing the contest.

Just my simple POV...

 

[GregLee]

What does it even mean to say "The contest accidentally allowed what our rules specifically prohibited"?. Contestants who violated the rules should have been disqualified.

 

[MichaelB]

I wonder if the cheaters are going to get hired by any Wall Street firms?

 

[FinanceDude]

I wonder if the cheaters are going to get hired by any Wall Street firms?

All of them have been in contact with HR..........

 

[Leonidas]

Didn't the first portfolio challenge have cheating problems as well?

Actually, I have a problem of the term "cheat" vs. "opportunity".

The "players" recognized a valid opportunity in the trading scenario, and they took advantage of it (unlike those of lesser thought processes).

I made a nice living (and have a great pension) dealing with that sort of people in the real world. I called them targets. Or suspects, defendants, crooks, mopes or *$%*#s.

They would see an opportunity, and I was just one of the risks.

 

[eytonxav]

I wonder if the cheaters are going to get hired by any Wall Street firms?

I wouldn't doubt it; maybe they should state that accomplishment on their resumes. It would also be nice if we could do a reset like that in real life.

 

[JPatrick]

Didn't the first portfolio challenge have cheating problems as well? .

They did have problems also. I believe some "not qualified" people slipped under the wire, but were eventually detected and sent packing.

 

[Leonidas]

They did have problems also. I believe some "not qualified" people slipped under the wire, but were eventually detected and sent packing.

It wasn't a case of not being qualified, it was outright cheating. They would look for stocks with after hours earnings scheduled, and then open up trades for those stocks in their browsers. As long as the trade was initiated (but not finalized) before market close, it would show up as being a trade made before the close. They kept the browser windows open and waited to see what the stock did after hours. They completed the trades on those stocks that saw after hours price increases, and just closed the window on any losers. Voila, a 100% ability to pick winners! Bernie Madoff would have been proud.

CNBC's Easy Money - BusinessWeek

CNBC did not have much credibility in dealing with cheating back then, I hope they do better this time. I participated in the original contest, but did not enter this time because of the cheating and how CNBC drug its feet in addressing it during the last contest.

 

[Koolau]

Well, at least you can now claim membership in the "We are the 99%" movement!

There was an old axiom in the stock-car racing world which spoke about "cheating fair" (e.g., carburetor restrictor plates which actually passed more air than allowed). Such things became "tolerated" as long as they didn't become too blatant.

Sounds like the 1% in the CNBC contest were "cheating fair" and so they didn't get suspended. The contest folk just had to go back and tighten the rules. Best luck when the contest resumes. It's probably a long shot, but $1,000,000 could really boost your retirement stash in a hurry.

 

[JPatrick]

Well, at least you can now claim membership in the "We are the 99%" movement!

.

Wow! Now that's awesome. Wait just a moment while I paint my face.

 

[2021Dream]

Do they allow you to short and/or buy derivatives? If so, you could team up with a buddy and make polar opposite bets on high-volatility stocks, then split the prize.

 

[JPatrick]

Do they allow you to short and/or buy derivatives? If so, you could team up with a buddy and make polar opposite bets on high-volatility stocks, then split the prize.

Well no, not directly, but I was using bull and bear 2&3 X ETF's which contain derivatives in an attempt to double or triple an index. You get 5 portfolios so you could bet one against another if you wanted..
The leveraged ETF's worked well for me, but it required a great deal of attention. The "W" shaped charts we had were perfect for the strategy.
My head wants to explode just thinking about it..Going to pause for another "Land Shark," w/lime..

 

[pb4uski]

I wonder if the cheaters are going to get hired by any Wall Street firms?

Actually, the cheaters currently work for Wall Street firms and are doing the contest for fun and bragging rights.

 

[RunningBum]

Actually, I have a problem of the term "cheat" vs. "opportunity".

The "players" recognized a valid opportunity in the trading scenario, and they took advantage of it (unlike those of lesser thought processes).

It's not the problem of the "players", but of those running the constant (somewhat like real life). If those that were "running" the contest screwed up, is that the responsibility of the participants to correct the basis of the constest?

For me, it's a bit like real life investment/trading. You identify the risks, you identity the opportunity, and you make your bet (place your trade). If the participants recognized a problem in the base scerenio, than they are a bit more intelligent than those creating/managing the contest.

Just my simple POV...

Do you view insider trading the same way? There's nothing but a law to prevent an insider from placing an order. There's a risk of getting caught, an opportunity to make a big profit on unannounced news, and they probably figure they are a bit more intelligent than the regulators.

I have no problem at all calling these traders "cheaters".