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Last year, McGill University finance student Charles Feng's big investment idea was buying stock in Tesla Motors Inc.
This year, he is searching for better investments, as the stakes are far higher, and a strategy that worked in the past may not pay dividends going forward: Tesla shares were down 11 per cent in 2016.
Mr. Feng, a 20-year-old from Montreal, is among over 1,000 Canadian university and college students already entered in the first Capitalize For Kids Student Challenge, a national investment contest that kicks off at noon on Jan. 16 and runs through to Aug. 16. The deadline for entering is Jan. 15.
The contest, which organizers abbreviate as C4K, is both a fundraiser and an opportunity for aspiring portfolio managers to polish their skills before an audience of potential employers. After the contest finishes, the OMERS pension fund, Royal Bank of Canada and Bank of Nova Scotia will provide career mentors to top performers. The top 30 stock pickers get their résumé screened by a leading domestic financial institution.
Entry is free, but organizers are handing out prizes – including Apple iPads and watches – to students willing to raise $100 or more. The money is going to brain and mental-health research at Toronto's Hospital for Sick Children. Top performers also receive $1,000 credit for an outfit to wear to job interviews.
Mr. Feng is a member of McGill's investment club and part of a network of contest ambassadors in business programs across the country. He signed on to C4K to support the charity, but also for the chance to match wits with peers. He said the competition provides an opportunity "for students across the country to show their deep knowledge of finance."
The opportunity to showcase individual market insights stems from the fact that C4K contestants need to both pick stocks that soar and justify their choices by sending in a short 500-word explanation of their investment thesis.
Contestants will be scored on their performance and logic – each count for 50 per cent of their final mark. Capitalize For Kids executive Justin Scaini said: "Our goal is to ensure challenge winners are selected based on their skill and investing acumen, rather than luck."
Performance is tracked by a New York-based company called Portfolios For Purpose, which specializes in running charity fantasy stock competitions. C4K has recruited judges from the money management industry to score the investment thesis. Criteria include the clarity of the reasoning and the creativity behind the choices.
For inspiration on her C4K portfolio, Dalhousie University commerce student Emma Steiner has been following investment gurus such as Howard Marks, the co-chairman of Oaktree Capital Management who writes a widely-followed quarterly memo. The 21-year-old Toronto native says she's developed a top-down, macro-economic approach to markets, but when pressed for specific potential stock picks, Ms. Steiner said in an e-mail: "I can't reveal my strategies!"
Ms. Steiner is serving as an ambassador for the C4K contest at Dalhousie and a four-year veteran of the school's investment club, which runs a mock $100-million portfolio. She said: "For students who have a passion for investing, this is a great way to both get involved in the industry and give back."
Andrew Willis