Fourth-year Atkinson bachelor of administration student Richard Marzec – also known as Backflush – is $1,000 richer after winning the recent University Investment Challenge. In fact, he is not only the largest weekly-gain winner for the final week of the competition, but also the grand prize winner.
Left: Richard Marzec
Marzec said he found the challenge “very difficult”, adding, “Due to its short-term nature, a lot of risky investments and strategies need to be used to achieve a significant return. I would recommend it for all students who are thinking about entering the market for the first time, because it’s a great learning tool. I’m look forward to entering the challenge again in the fall, since my investment research goes on.”
This was Marzec’s third time in the competition. He entered the challenge the first time through a class he took with Alan Marshall, a professor in Atkinson’s School of Administrative Studies.
“Then I entered the challenge again to test some of my own market observations and investment theories. I have been researching the best historical market performers in the last 40 years to determine what traits they all had in common before their explosive stock runs. I use the challenge as a laboratory to test my own theories.”
Marzec said the second time he entered, he placed ninth, after leading for a few weeks. “The third time, I decided to use mostly options, since I wanted to become more proficient in their use and understanding. But I still invested only in companies that met my investment criteria, that is, which showed strong earnings and revenue growth, high return on investment, high relative strength and so on.”
A newsletter from the University Investment Challenge organizers stated, Marzec earned “a phenomenal $81,000+, making this a 130 per cent increase on his portfolio in just one week. The markets did not disappoint, as his call-option-filled account rocketed to first place.”
The University Investment Challenge works this way: Competitors are judged on the total increase in their account portfolio. The competition, which runs for 10 weeks so that it can be integrated into a class curriculum, is open to any college or university student in Canada who is taking at least two courses during the term of the challenge. Marzec described it as a “very realistic investment simulation which approximates trading with a real discount brokerage. Students can invest in stocks and mutual funds and also use advance investment vehicles, such as short selling and options.
“I can attest to the real-life accuracy of the simulations, since it is just like my own online brokerage service,” said Marzec.
Right: Alan Marshall
York Professor Alan Marshall said that Marzec’s win was the second overall victory in the 10-year history of the challenge. “Chris Kaiser, another of my ADMS4500 students, won it in 1995.”
More on Richard Marzec’s strategies
“During the challenge the Nasdaq was in a correction after a year-long rally,” said Marzec, who added that he used an options strategy he learned “during one of Professor Marshall’s lectures…. I was anticipating a rebound in the Nasdaq after it fell to its 200-day moving average, so I purchased a number of ‘at-the-money’ call options on the Nasdaq – QQQ, or ‘cubes’.
“Call options on stocks that were holding up well during the correction were also purchased. Initially, the value of my portfolio dropped to 728th out of 755 participants, but then the Nasdaq rallied during the last week of the challenge. As a result, my portfolio increased $81,933.90 in value for the week and $45,212.71 on the final day. The win came as a complete surprise, since I was not even close to the leaders the day before. I think I upset some people that day,” added Marzec in a slight understatement.