Sunday, April 19, 2009

Nikko Asset’s ‘Investment King’ Wins With 55% Return

Japan’s best stock picker is known as ‘T-111,’ a 26-year-old man who bested thousands of would-be Warren Buffetts in Nikko Asset Management Co.’s online “Investment King” competition.

Short-term bets based on technical indicators with 1 billion yen ($10 million) of virtual money helped T-111 post a 55 percent return in the year through March. T-111 and his four closest rivals posted an average gain of 33 percent, compared with the Nikkei 225 Stock Average’s 35 percent decline. Nikko Asset’s Capital Open fund, which the contestants competed against, lost 36.2 percent.

“These are some amazing results,” Bill Wilder, president of Nikko Asset, said at an April 17 ceremony at the Tokyo Stock Exchange to honor the top performers.

The top five virtual investors will be offered the chance to sit for entrance exams and job interviews at Nikko Asset, where assets under management have fallen by a quarter since June 2008 to the equivalent of $91.6 billion, according to the firm’s Web site.

More than 4,000 people signed up for the competition, which was limited to bets on Japanese stocks. No more than 10 percent of investments were to be in a single stock and holdings of cash were capped at 50 percent of total assets, according to Nikko Asset.

Golden Crosses

The competitors had to contend with a stock-market slump caused by a deepening global recession and credit crisis, which accelerated following the collapse of Lehman Brothers Holdings Inc. in September. In the past 12 months, only 8 of the Nikkei’s 225 stocks have posted gains.

T-111 used Excel spreadsheets to track changes in “short, medium and long-term trends” of stocks. He declined to disclose his name for privacy reasons. Misato Ito, a spokeswoman for Nikko Asset, also declined to divulge his name.

“From the start I knew it was a bear market, and I studied the trends using indicators like golden crosses to find turning points,” T-111 said in an interview after the ceremony, where he was crowned by Wilder. “For me, the Lehman shock wasn’t a problem. I saw it coming, but can’t reveal how I knew.”

A golden cross occurs when a short-term moving average, such as 15 days, moves above a longer-term average, for example 50 or 200 days, indicating a stock has entered a bullish trend.

The losses in the past year may be in the process of reversing, said T-111.

“I haven’t definitively confirmed it, but my feeling is the trend has changed,” he said.