How winners play: strategies from the world's investing competitions

Imagine 100 players. Only the person in first place wins. If you invest sensibly and earn a solid 8%, you will almost never beat the luckiest of the other 99 players. Coming 30th and coming last pay the same: nothing. The smart move becomes swinging for the fences, because you only need to be lucky once.

Economists call this a convex payoff. Fund managers chasing year-end rankings face a milder version of it. Use the simulation below to see the effect for yourself. Every player has the same small positive edge; the only thing you control is how volatile your portfolio is.

Because results come from real accounts, the US Investing Championship (USIC) is a test of both skill and nerve. Winning returns in the stock division are routinely in the triple digits. David Ryan won three years running (161%, 160% and 118% from 1985 to 1987). Mark Minervini won with 155% in 1997 and returned in 2021 to win with 334.8%. In 2020, Oliver Kell posted 941%.

Their styles differ in the details but share a common playbook: buy the strongest stocks in the strongest market, at precise entry points, and cut losers fast.

David Ryan trained under William O'Neil, whose CAN SLIM checklist looks for: strong Current quarterly earnings, strong Annual earnings growth, something New (product, management or price high), tight Supply and rising demand, Leaders not laggards, Institutional buying, and a healthy Market direction. The idea is that the biggest winners of every cycle share these traits before they make their big moves.

Stan Weinstein's stage analysis says a stock's life repeats in four phases. Contest winners avoid the slow base (Stage 1) and the decline (Stage 4). They concentrate their money in the strong uptrend: Stage 2.

Minervini's SEPA method (Specific Entry Point Analysis) waits for a Volatility Contraction Pattern (VCP). The stock pulls back several times, and each pullback is shallower than the last, with trading volume drying up. This tells you sellers are running out. The buy point (the "pivot") is the moment price breaks above the top of the final, tightest pullback on a surge in volume.

USIC champions are often right less than half the time. They still win because their average gain is several times their average loss. Typical rules:

• Cut every loss quickly, often at 5–8% below the buy price, with no exceptions.
• Pyramid into winners: start with a partial position and add only as the trade proves itself.
• Concentrate in a handful of top ideas when the market is healthy. In a one-year contest, a diversified portfolio of 40 stocks rarely wins.
• Go to cash when breakouts start failing. Several champions credit sitting out bad markets as much as picking stocks.

Oliver Kell describes his approach as a "cycle of price action", with named setups such as the wedge pop and EMA crossback. The aim is to buy early in a new uptrend and add as it confirms.

In 1987, Larry Williams turned $10,000 into more than $1.1 million, an 11,376% return that still stands as the contest record. Ten years later his teenage daughter, Michelle Williams (later an Oscar-nominated actress), won with a reported return of about 1,000%.

Futures let traders control large positions with little cash (this is called leverage). A 2% move in the underlying market can mean a 20% or 40% move in the account. That makes the contest less about what you trade and more about how much you bet on each trade.

Below, three traders take exactly the same 120 trades. Each trade wins 45% of the time, and a win pays twice what a loss costs, so all three have a real edge. The only difference is how much of the account they risk per trade. Press reshuffle to see a new sequence of wins and losses.

With no real money at risk and only first place counting, the maths from the simulation above takes over. A sensible portfolio almost never tops a leaderboard of hundreds of players over six weeks. A single wild bet sometimes does.

Teams receive a client profile, for example a family saving for a goal, with a time horizon, risk tolerance and preferences. They build and manage a portfolio and submit reports and a final presentation. A team that earns 40% by buying one volatile stock would score badly, because it ignored the client.

Here, "strategy" means the strategy of a persuasive, well-supported investment case. Winning teams treat it like professional sell-side research. University stock pitch competitions reward the same skills in a shorter format.

Financial data is noisy, and with enough tuning almost any model can look brilliant on past data. Leaderboards on Kaggle often "shake up" when final scores move from the public test set to the hidden one: teams that tuned to the public scoreboard drop, and robust models rise.