There is no deadline that is not met and the grand finale of the Second Interuniversity Investment Contest, organized between the Mexican Stock Exchange School of the Mexican Stock Exchange group, El Economista and Peeptrade, was held on December 1, from the floor of auctions, and in the company of BMV Group executives.
During a month, participants from 45 different universities and 172 teams had to build a portfolio of stocks and ETFs, using a simulator. For this, the teams – divided into the Undergraduate, Postgraduate and Open Category categories – received virtual $ 100,000.00 USD to invest in the global market.
There were three finalists per category and the selection criteria was based on risk adjusted return, for which the Sharpe Ratio was used, as part of the competition rules.
The purpose of the contest was to promote financial education and best investment practices, thus avoiding unnecessary risk taking. For this reason, participants were not allowed to carry out intraday trades – contrary trades of the same asset on the same day – once a position had been acquired, so they had to wait until the next day to do the opposite trade.
In the end, there were three contestants for each category, who had to defend their strategy – in person or online – before a panel of experts made up of Luis Miguel González, editorial general director of The Economist; Gerardo Aparicio, director of financial culture for the Mexican Stock Exchange and Rubén Perera, director of Information and Statistics for the Mexican Stock Exchange.
Among the prizes to which the finalists were credited were participating in photography on the auction floor, the possibility of participating for free in the next Peeptrade Global Contest (which could lead to a ceremony at the Nasdaq in New York , in case of being finalists), a diploma imparted by the BMV with a 100% scholarship and a cash prize of $ 70,000 for each category ($ 40,000 first place; $ 20,000 second place and $ 10,000 third place).
And the first place winners in the Postgraduate category were “MAF MTY 05”, a team made up of Antonio Favela Hinojosa, Miguel Recio Velázquez and Maximilian Gelse, representing the EGADE Business School of Tecnológico de Monterrey. The second place went to “Duranyork”, and the third to “Smart Investments”.
In the Undergraduate category, first place went to “Los Rayo Mcqueen”, a team made up of Alan Pérez, Esteban Herrera and Eduardo Sánchez, representing the Banking and Commercial School (EBC). The second for “Los Tilines” and the third for “Luis HCV”.
In the open category, first place went to “FAMCD”, a team made up of the spouses, Janeth del Rosario Domínguez González and Sergio Campos Rodríguez, while second place went to “UY Scoti”, the “Shiba” team did not appear .
To cast their vote, the judges considered factors such as: portfolio strategy, risk management, Sharpe Ratio and the quality of the exposure.
Strategies and portfolios
In the case of MAF MTY 05, part of its active strategy was based on considering events such as the holiday season in the US (Thanksgiving, Black Friday), disruptions in supply chains, changes in the Fed and the situation regarding the COVID-19 pandemic with stocks that gave them fast returns, ETFs and diversification, which resulted in a final Sharpe Ratio of -0.38 and an absolute return of -0.75%.
“If we want to generate in the short term, we have to have an active strategy for investments in the portfolio,” said Antonio Favela Hinojosa.
For their part, Los Rayo Mcqueen chose to carry out a macroeconomic analysis, invest in assets with beta less than 1, and consider factors such as growth stability and solid fundamentals, for which they integrated into their portfolio both stocks -health, defense of the consumer and technology – such as ETFs. They had a Sharpe Ratio of 1.02 and a return of 1.26%.
“The biggest mistake investors make is to believe that what happened in the recent past is likely to persist …”, Eduardo Sánchez mentioned, regarding a quote from investor Ray Dalio.
The FAMCD team decided to put together a comprehensive portfolio initially made up of 16 stocks, which would not require constant reviews. Despite being inexperienced, they achieved a Sharpe Ratio of 1.71 and a return of 3.33%.
“Our motivation is to make long-term investments, to develop a retirement savings plan,” said Janeth del Rosario.
The reduction of asset purchases by the FED, inflation, the news regarding the emergence of Pfizer’s anticovid pill and the worldwide threat of the coronavirus variant, omicron; were some of the challenges in the market that the participants had to overcome.
According to Rubén Perera, Director of Information and Statistics of the BMV, the result of the contest was the learning that the participants took to really know what the world of investments is like, “without a doubt, it is what we are promoting as a market, like the Stock Market, that people know, that people learn, that people educate themselves and that this leads to better investors in the country ”.
For his part, Juan Mendoza Rivera, CEO of Peeptrade, explained that the social network in which users can monitor other portfolios for free, has been doing this for six years, “it is in our DNA, we enjoy it a lot.”
Gerardo Aparicio, director of the Escuela Bolsa Mexicana added that “any type of educational methodology leaves you with an important background and knowledge and elements to be able to analyze, evaluate and propose initiatives that have to do with the growth of people, confirms once again that finances are made in practicality ”.
In this way, the managers congratulated the winners and invited more people to participate the following year. Congratulations to the winners.
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