James - Markets Insight Game

I was attracted to the Barclays Stockfuse Market Insight game as an innovative way to put into practice my theories about share pricing and valuation whilst learning more about how the market reacts to developments in real time. When I first began, I found myself trading equities of companies I already knew however, as the game progressed, I began to develop a criteria through which I made my stock picks. By looking at companies I felt represented good value, often under-priced shares driven down by market consensus rather than the underlying factors I felt were important.

Stockfuse presented a great way to deploy my ideas.

I could go for short term gains by investing in stocks with upcoming earnings reports or likely M&A activity whilst also maintaining a portfolio of longer term investments. There were stocks which I felt would increase as the companies retreated from the negative news stories or as new management reforms came into play.  

The biggest lesson learnt through the Market Insight game is certainly the importance of market consensus in driving a stock’s price. Sometimes a well-capitalised firm with strong EBITDA multiples in a growing industry can find its price driven down by a piece of bad news or Macro factors beyond its control. The other area I have learnt much about is the practice of short selling: whilst possible to make a huge gain, it is also easy to suffer major losses on a short position. Stocks I decided to short had to be carefully monitored and I had to stick to my initial stop-loss even when the temptation to “wait and see” was present.  

Overall, I feel that the environment Stockfuse creates, whereby you are involved in the markets in real time yet able to test investment theories comfortably (knowing the environment in which you are doing so is risk-free) is an unparalleled opportunity. I encourage anyone with an interest to get involved!