“Don’t give up, don’t ever give up.” Jim Valvano

By John Lohr
This Sunday is Selection Sunday! March Madness is upon us. Men’s college basketball tourney time is the greatest spectacle in sports and is the second biggest wagering event (behind NFL games, collectively). It has inextricable ties to Wall Street because once upon a time, there you found the biggest office pool in history. Ever. And it ran nearly year-round for years until the Feds supposedly broke it up about 20 years ago.
The traders and specialists of Wall Street that manage the prices of the stocks we buy every year orchestrated a multi-million dollar market for college basketball picks in the NCAA tournament. It was legendary. Teams were bought and sold on the market for set prices that changed daily, just like stock prices. Starting in the pre-season, you could buy a team and throughout the college basketball season, you could buy or sell teams or buy or sell long or short options on any team. Unlike your current office pool, the prices weren’t for the faint-of-heart. Duke, for instance, might have gone for $50,000 this pre-season. Millions of dollars changed hands and the winners weren’t necessarily the ones that owned the ultimate champion. Just for example, suppose this pre-season Kansas went for $30,000. It would have gone higher after they went 7-0 to start the season and then leveled off during their 14-7 late season. And then there is Oklahoma, the Bitcoin of basketball. They have the volatility of a crypto ping pong ball in a room full of mousetraps. They started slow, had a 10-0 early season surge then tanked, finishing 4-11. Once a darling, they might not even make the tournament. If you had the foresight to sell Oklahoma short when they were winning (you don’t own them, but bet they will lose) you could have been a big winner.

Personally, I don’t think the Feds broke up the Wall Street pool, I think it just migrated to the internet where you can wager gazillions on thousands of online gambling forums. So, what does this have to do with investing other than the fact that everybody and their brother has made Wall Street/ Casino comparisons? I came up with this game. Let’s call it Stock Hoops©. I’ll pick 6 teams: the favorite, a personal favorite, a long-shot, most boring, an overrated and a “no chance”, and add the field (everybody else). Then I pick stocks to correspond to each team. Using today’s current Vegas odds and stock prices at the close of business on March 8, 2017, we place a hypothetical $100 investment in each team and stock. After the final on April 2, we see which investment/team made more, using the opening stock price on Tuesday, April 3. The winner of
Stock Hoops will be the player who makes the most hypothetical money in the three weeks. I’ll showcase the stock picker and the hoops winner(s) on our website moneyculture.org. Confusing? Nah, it’s simple. Let’s see:

CURRENT FAVORITE: VILLANOVA. 9/2. Repeat? Maybe. Tough team, plus classy Coach Jay Wright. Stock: Disney: $104.03 They’ve been there before.

OVERRATED: OKLAHOMA 40-1 Star, Trey Young is, well, young, erratic. The biggest stage will be tough, if they make it. Unpredictable. Stock: Alibaba. $187.18. Who? Best bet is short.

MY PERSONAL PICK: DUKE 5-1. No, I didn’t go there or live in NC, but I have a Duke flag flying. Peaking at the right time. Bagley, Allen, Carter, solid bench. Stock: Apple, $176.94. Always a strong performer, Well run and customers still like them, mostly. You either love them or hate them, just like DUKE.

BORING TO WATCH, BUT MAY WIN; VIRGINIA 6-1 Tony Bennett: Still has a great voice, looks good for.his age. NO: wrong Tony Bennett. Virginia’s Tony is a really good basketball coach. A real winner. Can you name any player on the team? I didn’t think so. Stock: Stock: Berkshire Hathaway, Class B, $205.29. Great resume, good track record, great leader–Warren Buffett.

LONGSHOT: MISSOURI. 40-1 Big, Tough. Michael Porter is playing. He’ll be in the NBA next year after only a couple games. Cuonzo Martin looks like a really good coach. Stock: US Steel. $44.35. Not much respect previously, but who knows. A huge payoff if they win.

SHOULDN’T EVEN BE HERE: SYRACUSE. 100-1 They did win 20 games, but were 8-10 in the big ACC, which isn’t the strongest conference this year (According to Dick Vitale). Stock: Wells Fargo. $56.72. Customers scammed, products changed, unsubstantiated marketing claims, questions. Nobody should bet on them.

THE FIELD: A lot of good teams left like MICHIGAN STATE, NORTH CAROLINA, Kansas FIELD 1-1: Investment (fund) Vanguard 500 Index Admiral shares. $252.51. Tough to pick against the field this year. Buy.

We put a hypothetical $100 on each team and each stock, and the winners will be the team that wins it all and the stock with the best total return by the opening on April 3. You could come up with your own team or investment stock and let me know. Or you could take the hypothetical $100, buy hypothetical beer and chips and watch the games on TV.

AT ANY RATE, THOSE ARE MY PICKS. WHAT’S YOUR BEST PICK? Good luck.

BONUS: Women’s NCAA championship: Connecticut beats South Carolina 79-68

John Lohr can be reached at: john@moneyculture.org