Probabilistic investing: or how to win the Globe and Mail’s Stock Picking Contest (50% of the time)

For the past eight years the Globe and Mail newspaper has held an annual stock picking contest entitled My One and Only. In this competition, which starts on January 1 of each year, a variety of financial commentators, money managers and even academics are asked to select one stock – from the universe of stocks trading above $1 – of any public company quoted on the Toronto Stock Exchange (TSE). In addition to human participants, a completely random selection is added to the competition as well. The performance of all entries are tracked daily on a popular website and reported on quarterly in the actual newspaper, but the winner of the contest is the sole individual with the best performing stock at the end of the year, based on the close of trading on December 31. The final results of the contest are announced with much fanfare and publicity on the front page of the Report on Business section in the first week of the subsequent year. Aside from the publicity (negative or positive) from being part of the game, the winner’s only reward is a coffee mug, compliments of the Globe and Mail.