Web site promotes virtual money managing
Associated Press
NEW YORK — Buy low, sell high. Be patient. Don't panic.
Such advice sounds like it comes from mutual fund managers stating the basic rules of investing. But this wisdom comes from virtual managers — people who put together winning mock funds at Marketocracy, a Web site that lets investors create their own portfolios and see how they match up to professionals.
1. Mike Koza, 42, civil engineer, Sacramento, Calif., Toddly Growth Fund, 65.56 percent 2. John Taplett, 20, economics student, Purchase, N.Y., Diversified Service & Blue Chip Fund, 59.16 percent 3. Michael Kernan, 33, postmaster, Metairie, La., Pelican State Technology Fund, 55.86 percent 4. Stephen Smyk, 31, vice president of business development, New York, N.Y., Stephen Smyk's Net Rollercoaster, 54.67 percent 5. Dudley Smith, 69, insurance agent, Riverside, Calif., Dr. Dud's Mutual Fund, 52.44 percent 6. Michael Bienenstock, 48, professor, Humble, Texas, Michael Bienenstock's Mutual Fund, 46.84 percent 7. Vitaliy Yu Ptitsyn, 42, director of research for investment company, Kyiv, Ukraine, Vitaliy Ptitsyn's Healthcare Fund, 44.36 percent 8. Jean-Hugo Drouillet, 32, translator/language tutor, Philadelphia, Jean-Hugo Drouillet's Biotech Fund, 42.91 percent 9. Stevan VanNess, 31, regional representative for regional brokerage, Jenison, Mich., Demographic Health, 42.11 percent 10. Rocky Haag, 42, portfolio manager for private clients, Orlando, Fla., New Dawn Small Cap Opportunity Fund, 41.69 percent
During the second quarter, Marketocracy's top 100 virtual funds had an average return of 35.4 percent, higher than the 30.5 percent return posted by the top 100 professionally managed funds, according to Morningstar, a Chicago firm that tracks the fund industry.
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Here are the top 10 virtual funds managed by members of Marketocracy, a Web site that lets investors create their own portfolios and see how they compare with professionals. Each entry includes rank; manager's name, occupation and hometown; fund name and second-quarter return:
Marketocracy members — there are 35,000 of them — aren't doing virtual money managing for bragging rights alone. The Los Altos, Calif., company, whose Web site is www.marketocracy.com, says it plans to hire the best performers starting in 2003.
The thinking is that you don't have to be a professional to beat the market, said Ken Kam, who started Marketocracy in 2000 and is its chief executive.
The top virtual managers attribute their success to a variety of factors:
• "There's probably some beginner's luck involved. It's not easy picking stocks," said Mike Koza, a civil engineer in Sacramento, Calif., and the top fund manager in the second quarter.
"I kind of rode a good wave there. A lot of stocks were really cheap in March," he said, noting that he joined Marketocracy in March.
Koza's Toddly Growth Fund posted a return of 65.56 percent. Among the holdings of the fund, which concentrates on smaller company stocks, are Actrade Financial Technologies Inc. and EarthShell Container Corp.
His advice: "Be patient. In early April, some of my holdings dropped by almost half. But I hung in there. Don't follow the market all the time. Don't panic."
• Postal carrier Michael Kernan of Metairie, La., said he recommends investors not get too attached to their favorite stocks. He learned that the hard way as a real life investor with EMC Corp., a battered tech company.
"The best lesson I have learned in the past year is to cut your losses quickly. If a stock goes down 10 percent quickly you have to sell it even if you love it, because it is probably going to go down more," said Kernan, who placed third for the quarter.
Kernan's Pelican State Technology Fund has shares of Nokia and Cabot Microelectronics Corp.
• Do your research, said Dudley Smith, a life insurance agent in Riverside, Calif., and the second-quarter's fifth-best fund manager.
"I hear of a stock and I go, 'Oh, that sounds interesting,' and so, then I start following it," Smith said. "I usually won't invest right away. I want to get acquainted with the stock. I look up the fundamentals and the officers in the company."
Smith's Dr. Dud's Mutual Fund focuses on technology stocks, although Smith confesses to barely being able to run his own computer. The fund's holdings include Emulex Corp. and Finisar Corp.
• Common sense can be an investor's best tool, said Jean-Hugo Drouillet, who works as a translator in Philadelphia.
"It may seem too simple," said Drouillet, who placed eighth for the quarter. "But you don't have to come from Harvard or a prestigious business school to do well.
His virtual fund, Jean-Hugo Drouillet's Biotech Fund, includes shares of Protein Design Lab and Commonwealth Biotechnologies Inc.
