Jewish World Review April 30, 2003 / 28 Nissan, 5763

John Dorfman

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Consumer Reports


Mr. Bigshot Stock-Market Game Has Thrills, Ills


http://www.jewishworldreview.com | (Bloomberg) A stock- market game called Mr. Bigshot recently hit the market.

No stock-market game could be as exciting as the market itself. Yet Mr. Bigshot does induce that feeling of agonized anticipation so beloved of traders and speculators.

Will I win? Will I lose? How much? How soon?

Each player starts with $100,000 (in chips, alas) and tries to turn it into $1 million. The game works through a series of choices between two stocks.

For example, it's January 1, 1965. Would you rather own Magnavox or Warner Brothers?

My wife and I tried it out this weekend. She chose Magnavox and earned a $33,000 profit on a $20,000 ``investment.'' Had she chosen Warner Brothers she would have lost $3,000.

All choices are made on January 1 of a given year. The game covers the years 1965 through 1999. You must hold a stock for at least one quarter, and can't hold it for more than one year.

At the end of each quarter, you are told how the stock has done, and must decide whether to sell or hang on. In the game, a ``year'' passes in a few seconds.

Picking Your Stock

You don't find out the name of your stock until after you've completed your turn. Instead, you pick your stock based on about a dozen statistics for each company, plus descriptive information about the company and its industry.

Magnavox, for example, was described as in the ``TV & Radio, Electronic Equipment'' business. We were told that ``military work is again rising after its recent decline. The consumer base finds the company well established in high margin home electronics equipment.''

You are told each stock's price, price range, last quarter's performance, sales, net income, earnings per share, dividend, price-earnings ratio, dividend yield and operating profit margin.

You also get the stock's rating from Moody's Investors Service and Standard & Poor's at the time.

Adding Things

Those are good, sound pieces of fundamental information. There is nothing in the game that I would take out. There are a few things I would like to put in, but a game card has only so much space.

When I played, I held each stock I picked for a full year. That's not surprising, since my instinct is to buy and hold. My wife, who in real life is also a buy-and-hold investor, was more likely to sell a stock before the year was over if she had a decent gain on it.

Any stock-market game is bound to have some artificiality about it. In Mr. Bigshot, you don't know some things that you would know as a real investor. And you know some things that you wouldn't know.

For example, if the year is 1980, I know that Ronald Reagan will be elected for his first term in November, that U.S. citizens will be held hostage in Iran, and that the economy will be weak all year.

The Name Game

If I were really picking a stock on Jan. 1, 1980, I would know none of those things.

In short, there's a huge difference between the pretend uncertainty of a game and the real uncertainty that confronts an investor who is putting up money in the actual market.

One gripe I have about Mr. Bigshot is the fact that you don't know the name of your stock until after your investment period is over. This is an artificiality that I think takes some fun out of the game.

I assume that Courtney Tudor, the mechanical design engineer who created Mr. Bigshot, had a good reason for hiding the company names. He probably believed that if players knew the stock name they might be able to recall how the stock did in the year in question.

It seems to me that if a player knows enough to do that, he or she probably can ``rig'' the game through other clues.

For example, I knew how certain industries had performed in certain years. Also, in some cases, I was able to guess the name of the company.

No Margin Players

Some of the game's terminology is clunky. For example, the two stocks are designated as ``Big'' and ``Shot.'' The game pieces have names such as Ms. Gotroxx and Buff.

Aesthetically, the game board, pieces and chips are less pleasing than those of some rival games. Monopoly, for example, has a nicer look and feel.

I did a little spot-checking on the game's accuracy, and was largely satisfied. One item that puzzled me, though, was the description of Wyle Electronics as in ``science fiction services and systems.'' I thought it was an electronics distributor.

On each turn you can bet - er, excuse me invest -- $20,000, $50,000, $100,000, $200,000 or $400,000. Margin junkies beware: You can't invest more than you have.

If one sticks with small bets, I estimate that the typical game would take a couple of hours. There is a natural pressure, therefore, to increase your bet as the game wears on.

I see no harm in that, as long as the investor doesn't carry a ``double or nothing'' mentality over into the real stock market.

Despite the game's limitations, I think that Tudor's basic concept is a good one. If you want to take a flyer, go to the company website, mrbigshot.com. The game costs $24.95 for the board version, $19.95 for the CD-rom.

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John Dorfman, president of Dorfman Investments in Boston, is a columnist for Bloomberg News. The opinions expressed are his own. His firm or its clients may own or trade investments discussed in this column. Comment by clicking here.

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