CNBC Million Dollar Portfolio Challenge: Wednesday, Week 1

Update:  This is a post from the 2007 Portfolio Challenge.  If you're looking for posts on the 2008 contest, click here.

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As you're likely aware if you've tuned in to CNBC for 15 seconds or so at any point in the last couple weeks, the network is sponsoring a contest over the next 12 weeks, in which players manage fictional portfolios of $1,000,000 in "CNBC Bucks" for a chance to win $1,000,000 in honest-to-goodness bucks.  With more than 220,000 players signed up, the contest officially kicked off on Monday, but it's not too late to register, which you can do here.

After two days of trading, I'm pleased to report I've made it to #23 on the leaderboard, notching up a 24% return and waving magnanimously on my way past 99.99% of the field.  (Today, the market was unkind to me and I'll be promptly shuffling off the leaderboard tomorrow morning, so I'm enjoying this while it lasts.)

To win the million dollars, you need to do one of two things: put up the highest percentage gain during any one of the 10 weeks of play (which wins you an automatic $10,000) or put up one of the 10 highest returns over the whole 10 weeks.  Those 20 players then have their portfolios reset to $1,000,000 in funny money and compete for an additional 2 weeks, after which the player with the most valuable portfolio wins the shebang.

There are also extra credit questions, which enable you to win up to $3,000 fake dollars per day, which brings me to the "You know what grinds my gears?" segment of this post.  (For extra blogworthiness, it involves the sloppy inaccuracy of the mainstream media, specifically the Associated Press.)

$3,000 may seem like a small amount in a $1,000,000 portfolio but that's more than the gap currently separating the highest scorers, so the extra credit is worth pursuing.  You earn it by answering two straight-forward multiple choice questions about the financial markets (one worth $1,000, the other $2,000).  Yesterday, one of these questions (potentially slightly paraphrased) was:

"General Motors February sales rose by how much?"

The correct answer is 3.4%.  You can verify this authoritatively via GM's own press release and the company's corresponding SEC filing.  However, 3.4% was not among the choices available.  The two closest options were 3% and 3.7%.  While neither is precisely accurate, and despite the fact that 3.7% is closer to 3.4%, 3% seems to be the undeniably better choice, as it's at least accurate if you're rounding to the nearest whole percentage point (as is not uncommon and as Reuters did in their report).

The AP, however, in all their attention to detail, reported the number as 3.7%.  This appears to be nothing more than a transcription error committed by the AP reporter who wrote the story.  Unfortunately, the incorrect AP story seems to be the one that the CNBC trivia question writer used to research the question.

I chose 3%.  I chose... poorly.

Understanding that foregone bonus bucks could make or break a portfolio's chance at the top spot, I e-mailed customer care, as directed by the FAQ, and was confident I'd receive a timely response (since the automated response promised me one).  36 hours and 3 follow-up e-mails later, I continue to wait.

Don't get me wrong - I'm not faulting CNBC here.  With hundreds of thousands of players, I can only imagine the logistical nightmare going on behind the scenes.  I remain genuinely confident they'll make it right.  But my ire has been burning brightly for the AP's increasingly characteristic sloppiness.  Sure, anyone can make a typo (I make pletny), but when the service an institution is providing is the simple dissemination of numerical financial news, you'd think there'd be a bit more robust error-checking system in place.  GM offered up the press release, after all.  All the AP needed to do was summarize it and re-publish it.  Copy-and-paste, folks.  At least for the numbers you're regurgitating.  How do transcription errors continue to plague in this futuristic world of buttons and intertubes?

Anyway, after all this teeth-gnashing and fist-shaking I was just about ready to take a deep breath, let my $2,000 fake dollars go, and concentrate on something more meaningful in life, like iTunesing last night's Dirt, when I pulled up an aftermarket report discussing my most recent contest pick, Men's Wearhouse, Inc.  Once again, the author was the Associated Press (institutionally speaking; no byline on this one, so no way to tell if it was the same author that butchered the GM report).  The story contends:

Men's Wearhouse Inc. rose $1.29, or 3 percent, to $43.30 in the extended session after the Houston-based clothing retailer said fiscal fourth-quarter profit rose 60 percent on a jump in sales. Earnings beat Wall Street estimates.

In fact, the stock closed at $43.30 in the regular session, before climbing another 5% in the extended session to finish at $45.50.

This screw-up won't have any bearing on my fake money, but it really makes me scratch my head and wonder just frequently this supposedly reputable financial news source is plainly and materially inaccurate about very basic facts and figures.

Back to you, Tom and Diane.