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Student Winner Finds Rewards In Risk

A sudden switch in investment strategy turned out to be a top decision for the winning team of the CMC Markets University of Auckland Trading Challenge.

7 October 2021

Student James Lilley, here with Chris Smith of CMC, traded through a volatile patch in the markets to win the challenge.

Student James Lilley said in the first week of the three-week competition, the team traded on fundamentals, investing in companies they knew, but were only plodding along.

“We quickly realised that due to the time constraints, this strategy was not going to cut it. Instead, we found ourselves doing risky trades in order to make fast returns.

“We also found tariffs being placed by the US and China made things quite unpredictable. For the last half of the competition, we switched to focusing on gold, taking advantage of the uncertainty around the US-China situation.”

This strategy turned out to be a winner in the student challenge.

The three weeks of the competition were among the year’s most volatile, due to trade war fears. Big initial public offerings also spiced up the action. Beyond Meat was one of the most successful IPO listings in history, but the launch of Uber was surprisingly underwhelming.

“The effect of the Trade War rumours on the market meant we had to change our strategy quite drastically. Once we got the hang of how the market seemed to be moving, it played mostly in our favour.”

Lilley says some teams made and lost some fortunes in cryptocurrencies. “We dipped our toe in at the beginning, but quickly got out due to how unpredictable we found it to be.”

They made only a few trades a day, squeezing in research and analysis between their university lectures.

“We did get up at 2am to trade on the US market a few times. We found that fewer, consistent big trades worked better than many small trades.

He says they were delighted with their win.

“However, there’s always room for improvement. There were some trades we made that provided learning experiences – we learned what not to do.”

Published 20 August 2019

This article does not contain any financial advice and has not taken into account any particular person’s circumstances. Before relying on it, we recommend you speak with a financial adviser. This story reflects the views of the contributor only. Content comes from sources that we consider are accurate, but we do not guarantee that the content is accurate.

Informed Investor's content comes from sources that Informed Investor magazine considers accurate, but we do not guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk.


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