University of Iowa sophomore dominates investing contest

Ryan Spaeth, center, is on a roll in the HawkTrade contest at the University of Iowa. Photo: UI Tippie College of Business

By Steve Dinnen

The Dow Jones Industrial Average has chalked up an OK year so far, rising about 12.5%. The S&P 500 Index stocks have fared better, rising 22.9% percent, while the NASDAQ Composite Index verged on great, climbing 39.8%.

And then there’s Ryan Spaeth, up 1,186%. The name is not an index, and the number is not an error. Spaeth is a University of Iowa sophomore who turned a $100,000 stake into an astounding $1,186,463 in a three-month span ending in mid-November. If only those were real dollars!

The finance and business analytics major was participating (with phantom dollars) in the HawkTrade investing contest run by students in the university’s Tippie College of Business. The periodic contest challenges students to deploy the investing acumen they’ve accumulated during their time on campus.

This was Spaeth’s third run at HawkTrade. He placed third after his first attempt, before he won the whole thing on his second try, when he turned that $100,000 into $800,000. Not too shabby.

“Ryan is widely regarded as the GOAT of paper trading competitions,” said Credence Wernke, a fellow Tippie student who helped administer the HawkTrade contest.

Spaeth’s interest in investing started in high school in suburban Chicago after he injured his hand and could no longer compete in football or play the guitar. He started reading issues of the Wall Street Journal that were lying around the house and became intrigued by the facts and figures he gleaned about the stock prices of various companies. Soon enough, he entered a stock picking contest (again with phantom dollars) and topped a field of 3,000 competitors.

He honed his trading skills once he got to Iowa and entered the HawkTrade contests. He sharpened his vision to specialize on shorting shares — betting a company stock will fall in value. “It’s easier to predict when a company is overvalued,” he said. “I find little bubbles, little inconsistencies.”

Timing is key. Finding just the right moment to buy and sell has been key to his success. Without giving away secrets, he said his timing worked perfectly with Tempest Therapeutics Inc. (ticker: TPST), a startup working to cure cancer. It suddenly shot up on some news. “I shorted it around $6.25 and covered around $3.90, profiting around $160,000,” Spaeth said.

He has two more years at Iowa — and two more cracks at the HawkTrade. And after that?

“I’m planning on going into investment banking or private equity,” he said.

That might be his smartest decision of all.

 

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