The SoapBoxers

Back On April 15, we launched a Stock Market contest (click link to see insights from the participants) in which a team of Goliaths (personal finance bloggers) were matched up against a team of Davids (people who were not personal finance bloggers). At the end of June, the Dow stood at 8447.00 and had gained average 6.84 points during the course of the contest, making the Davids the favorites.

The market had a very strong July, and ended the month at 9171.61, up 724.61 for the month.

At the end of the day on April 14th (the 104th day of the year), the Dow was at 7920.18.

At the end of the day on July 31 (the 212th day of the day), the Dow was at 9171.61.

This is a gain of 1251.43, or 11.59 points per day. If we assume that the market will contain to gain at exactly the same rate throughout the rest of the year (yes, a ridiculous assumption), the Dow will be at 10945.17 at the end of the year (+ 3024.99 from April 14).

How do our contestants stack up?

I also invited visitors to play along at home. Let’s see how they are doing.

At this point, team David is strongly in the lead. What sort of month will August be? I think it will be a strong one, as “cash for clunkers” cash makes it way into the system (and more importantly, the public perceives cash for clunkers as the government giving back to “main street”). If this happens, team David could pull away even further. However, there are certainly a lot of ups and downs yet to be experienced this year!

OK, I said I wasn’t going to post any article this weekend, but here is a short one.

Back On April 15, we launched a Stock Market contest (click link to see insights from the participants) in which a team of Goliaths (personal finance bloggers) were matched up against a team of Davids (people who were not personal finance bloggers). At the end of May, the Dow stood at 8500.33 and had gained average 12.34 points during the course of the contest, making the Davids the favorites.

The market tried to tread water in June, however, closing the month down 53.33 points at 8447.00.  Once again, we’ll project the Dow’s year end close, assuming a linear trend.

At the end of the day on April 14th (the 104th day of the year), the Dow was at 7920.18.

At the end of the day on June 30 (the 181st day of the day), the Dow was at 8500.33

This is a gain of 526.82, or 6.84 points per day. If we assume that the market will contain to gain at exactly the same rate throughout the rest of the year (yes, a ridiculous assumption), the Dow will be at 9185.58 at the end of the year.

How do our contestants stack up?

I also invited visitors to play along at home. Let’s see how they are doing.

At this point, team David is still in the lead, but the fact that the Dow was down for the month of June has allowed team Goliath to get much closer.  Check back next month for the next update.

While most of us revel in the fireworks of the Fourth of July or the backyard barbeque, I for one take in a sporting event unlike any other. It is my favorite hour of television for the entire year. The Nathan’s Famous Hot Dog Eating Championship.  2009 ushers in the 94th installment of this major eating event. The contest takes place every year where it all started at the company’s flagship store in Coney Island on July 4.  This year will be a fierce rematch of two-time champion Joey Chestnut against six-time champion Takeru Kobayashi.

According to legend, on July 4, 1916, four immigrants had a hot dog eating contest at the Nathan’s Famous Hot Dog stand on Coney Island to settle an argument about who was the most patriotic. After ten minutes, Neer Sehgal had eaten thirteen hot dogs and was crowned the victor. The contest has been held nearly every year since, in conjunction with the fourth of July at the site.

To add to the dramatic theatre of the event, there is a weigh-in with the Mayor of New York City prior to the contest. On the day of the contest, the contestants arrive in the “bus of champions” and are announced to the eating stage much like Heavyweight boxing champions are announced in a Rocky Movie. Competitors arrive with props and the list of “eating accolades” which include world record holders in such culinary delights as hot wings, crab cakes, pickled pig’s feet and my personal favorite … mayonnaise.

It will be very hard to duplicate last years event, where Chestnut and Kobayashi wolfed it out bite for bite against one another. Kobayashi narrowly escaped a “reversal of fortune” at the buzzer, ( eating terminology for losing your lunch). After the end of the 10 minute regulation, both were tied at an amazing 59 hot dogs a piece. Next what ensued is one of the most exciting fifty seconds in the history of organized sport. This is way better than Elway’s’ drive against the Browns, MJ’s shot at the buzzer to beat the Utah Jazz, more climatic than Tiger Woods dropping in a long put to send the US Open Last year into a sudden death playoff. Heck I will even say it was better than the 1980 “Miracle on Ice”

I am talking about the monumental yet slightly constipating five hot dog overtime.  Chestnut won, but Kobayashi immediately vowed to return to reclaim the Coveted Mustard Yellow Belt which ranks up there with the WWE title belt in terms of prestige.

“Each July Fourth I am thrilled as an enormous crowd gathers in front of the original Nathan’s Famous,” said Wayne Norbitz, President and COO of Nathan’s Famous, Inc.  “We value our association with this great American holiday and I appreciate the fans, who come from around the world to witness the spectacle first hand while millions more watch on ESPN.”

Last year, Coney Island authorities stated that 40,000 fans crowded the corner of Surf and Stillwell Avenues in Coney Island to witness Joey Chestnut’s rematch with Takeru Kobayashi.  Amazingly, more than one million households tuned in to the contest’s live telecast on ESPN.

To add to the spectacle this year The 2009 contest will be preceded on July 3 by a hot dog bun eating contest, in which three professional eaters will take on three semi-professional eaters..elephants from Ringling Brothers Circus.

Vegas has the Pachyderms as the early morning line favorite.

I for one know exactly where I will be at high noon come this Saturday. Smack dab in the middle of my couch watching the battle for the bejeweled mustard belt…likely while enjoying a wonderful Johnsonville bratwurst and a beer.

Have a Happy and safe fourth of July!

Back On April 15, we  launched  a Stock Market contest (click link to see insights from the participants) in which a team of Goliaths (personal finance bloggers) were matched up against a team of Davids (people who were not personal finance bloggers).  At long last, we unveil the first monthly update.

At the end of the day on April 14th (the 104th day of the year), the Dow was at 7920.18.

At the end of the day on May 31 (the 151st day of the day), the Dow was at 8500.33

This is a gain of 580.15, or 12.34 points per day.  If we assume that the market will contain to gain at exactly the same rate throughout the rest of the year (yes, a ridiculous assumption), the Dow will be at 11,140.92 at the end of the year.

How do our contestants stack up?

I also invited visitors to play along at home.  Let’s see how they are doing.

Visitor Mike missed the  April 30 cutoff, but submitted a guess of 11,600 – a projected difference of just 459.08.

At this point, team Goliath seems to be off to a strong starts as the Dow has been fairly strong over the last 6 weeks.  There are still 7 long months ahead of us before the end of the year – a lot can change!  Check back each month for an update.

The rules:
Each player predicts the closing value of the Dow Jones industrial average at the close of day on December 31, 2009. Points are awarded on a 12-10-8-6-4-2-0 basis for being closest to the actual closing value. The score of all players on each team are added together, and the best team score wins.

I will update the contest every month, focusing on the actual rate of Dow rise or fall compared to the guesses. For example, if a player guesses a 850 point increase and the Dow increased 100 points in the first month, they would be on target. This relies on a false assumption that the market will move similarly in each month.

Note: this contest is for entertainment purposes only and is not to be construed as investment advice.

The predictions:

Team Goliath

Team Goliath consists of three people who write blogs related to personal finance.

Trevor of Financial Nut
Why do I choose 8,400?  Though I do not necessarily agree with Keynesian economic theory, I do feel that some of this spending is going to create some jobs and allow for money to be injected back into the economy.  By this time I would imagine that many of the Obama Administration’s plans to deal with all of these “toxic assets” and to create employment in an increasingly dying economy will be in place.  Right now the plans are only being discussed and just barely being implemented.

In addition, recessions in the past haven’t lasted much longer than what we’ve had.  This one is, however, very unique and may be longer.

But at the end of the day, who really knows?! 🙂

Lazy Man of Lazy Man and Money
Although some suggest that much of the recent drop is psychological, I think that much can be explained by the large amounts of credit that were extended over the last 10-15 years. More money in the system allows earnings to rise – which results in a lower P/E ratio – making it easier for buyers to justify higher prices.

We’ll see what happens in a bad economy where the earnings drop not just due to the lack of buyers, but the lack of easy credit.

I do, however, think much of the damage is priced in now. Although I am not a currency expert, I think it will be important to watch the impact of the stimulus package on the dollar in the next 8+ months.

Heidi of Bankergirl brings a bit of sugar and spice to a group filled with snails and puppy dog tails. 
Based on historical data, we have yet to hit the low for this economic cycle. I think that sometime in the second quarter (or possibly early Q3) of 2009, the dow is going to hit its low. It will recover throughout late Q3 and into Q4, but it will land around the low-to-mid 8000 mark.

Hope I’m wrong – my job is much more secure once we are back up to around 10,000.

Team David

Team David consists of three people who have ordinary jobs and do not write about personal finance.

Peter Rabbit is an IT Auditor.
The last few reports on housing and the purchase of durable goods were very encouraging. These are lagging indicators when we enter a recession as well as when we come out of one. This signals to me that the worst may be behind us. By no means are we in a period of growth but we may have stabilized. Basically, I am betting that we have about 4 more days of 500 point gains sprinkled in the next few months. But otherwise you will see a lot of +100 and -100 point days that just pass time and wash each other out.

Phil Ossifer is a computer systems analyst and has recently launched the (not finance) blog Chunga Goes Wild
Stocks WON’T perform like they did over the last 80 years. Unique circumstances of that period are unrepeatable, e.g., post-Industrial Revolutionary growth, outcome from wars, political/demographic changes, etc.

Monetary policy will float us for a while, but also leads us toward a serious, long-term decline. We now have more debt than any nation; we have a negative savings rate – and yet we look to more spending for the answer. Over-consuming and under-producing is not sustainable!

Finally, analysis based on a few known factors like bad mortagages, trade deficits, and economic cycles are short-sighted. We are now in a complex, unpredictable, global system (think: Chaos theory). Cheers!

Black Hole is where logic goes to die.  Fittingly,  he works in human resources.
In the past month, the Dow has been on the incline, and I think it will be up and down (in small variances) throughout the year, but I think towards the end of the year it will climb a little more steadily.  Banks will become more stable than they are now,  and the economy is receiving such a boost monetarily that it will definitely turn around and quicker than other “recessions”. 

Free agent
The Soap Boxers will not be a member of a team, but I will be awarded points on the basis of my finish. Thus, a good showing by TCO can serve as a spoiler for one of the teams. Think of me as the guy in the middle of a game of “keep away”.
I personally believe that much of the recent drop in the market is due to psychological factors. A lot of really good stocks are getting beaten up. When the Dow was hovering around 6500, P/E ratios were at five year lows. This is a time to snap up some solid blue chip stocks at good prices. I think that there will be some slight corrections in the near future, but that we have hit bottom and that the market will turn the corner once spring is in full bloom. The positive energy of spring will improve the mindset of potential investors.

Submit your own guess in the comments sections. Invite your friends to compete against you. I will also track the guesses of commenters in the monthly update.  Only guesses made before April 30 will be included in the monthly updates (sorry, had to make the cutoff somewhere).

Join us tomorrow, as the Casual Observer takes a look at a day in the life of an air traffic controller.  The Walrus will be our guide.