Getting people to pretend to earn money sounds like a job for Bernie Madoff. Stacey Asher sees it differently. She gets people to fake-earn (or fake-lose) money, and pay for the privilege, in a fantasy stock-picking league that benefits charities selected by the players.
Portfolios with Purpose, Asher’s nonprofit, asks players to select five stocks, long or short, and a charity. Those who post the biggest gains get to see a portion of the contest entrance fees (which range from $100 to $10,000 a person) go to their cause. If they lose, no sweat.
“If you’re not doing well, you don’t have to worry,” Asher said on the floor of the New York Stock Exchange last night at a reception to court new players. “Only the performance of the leaders is public, so there’s no reputational risk.”
Some guests shared their picks anyway. Jamie Dinan, chairman of York Capital Management LP, is competing in the by-invitation-only “master” class. “I wanted companies that could have 50 to 100 percent returns,” Dinan said. “Delta Airlines went up threefold.”
Paul Stamas, a vice president at General Atlantic LLC, said he did well going long on Groupon Inc. His fiancee, Stephanie Xethalis, operations and compliance manager at Artivest, said she made a “mistake shorting Best Buy.”
Alex Duran of Permian Investment Partners LP, who’s married to Asher and doesn’t play in the contest, said a good pick for 2014 would be the Spanish builder Fomento de Construcciones y Contratas SA. “It has a lot of leverage so it’s interesting, a lot of debt, but it’s on the verge of being refinanced,” Duran said. “It’s perfect because it has a lot of potential. You need something that will double over the next 12 months.”
Rick DellaRusso, a board member of Portfolios with Purpose, is recruiting players at Credit Suisse Group AG, where he works as an investment adviser. “We all pick stocks informally, but to do it this way is more meaningful,” he said.
Akiva Katz, co-founder and managing partner of Bow Street LLC, finished first in the professional category in 2012, the initial year of the competition. His win meant a $10,476 donation to Project Ore, a soup kitchen in New York.
“On a personal level, it was great to be able to compete on behalf of a fantastic charity my wife and I have supported for many years,” Katz said.
Doug Silverman, co-chief executive officer of Senator Investment Group LP, leads in the master category this year. If he wins, $66,000 will go to the Jericho Project, which supports the homeless and has started a homeless-prevention initiative for veterans. It would be among the year’s top five donations, said Victoria Lyon, executive director of Jericho Project.
Portfolios with Purpose is funded through sponsorships, personal donations and board support, said Asher, who previously worked in investor relations and marketing for a hedge fund. Her goal is to raise $100,000 next year for operations.
The contest is aimed at financial professionals and amateurs. “We have a sixth-grade elementary school teacher and an 88-year-old grandmother playing,” she said.
Registration for next year’s contest is due Dec. 31. The master players will include Marc Lasry, CEO of Avenue Capital Group LLC; Richard Pzena, chairman of Pzena Investment Management Inc., and Leon Cooperman, founder of Omega Advisors Inc.
David Einhorn, founder of Greenlight Capital Inc., played this year with selections made right on deadline. “I arrived at my picks through an informal discussion with the hard-working Greenlight team that was in the office on New Year’s Eve,” he said in an interview posted on the Portfolios with Purpose website.