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Beat the Street: W. Zhou Shall Win

05/02/08 - 06:44 PM EDT

TSC Staff

Note: All winning portfolios and players are subject to verification.

Yet again, diversification proved the difference in taking home the $5,000 cash prize in TheStreet.com's Beat the Street game. Everyone knows that a well-balanced and diversified portfolio is the key to long-term investing success, but who would have guessed that diversification can pay cash money in a weekly trading game?

W. Zhou, under the player name "Vivicat," finished with a portfolio value of $313,738.44. Vivicat is the second player to break the $300,000 barrier, with an outstanding 25.5% weekly gain. Coming into the last day of trading on Friday, it looked for sure that a long-only portfolio of airline stocks would take the treasure and glory. However, to the surprise of many, the biggest weekly gain came from a mix of airlines and financials.

Vivicat's winning portfolio was led by long positions in Northwest AirlinesNWA, Delta AirlinesDAL , AMRAMR, the parent of American Airlines, and UALUAUA, the parent company of United Airlines. But the kicker to the portfolio was two financial stocks, AmbacABK and MBIAMBI. These two financial plays proved to be the key to Vivicat's success with eye-popping weekly returns of 35% and 14%, respectively.

Congrats to W. Zhou on good diversification and even better stock-picking!

As you get ready for Week 5 of the game, be sure to review the following articles, which should give you a leg up on the competition.

The weekly Rocket Stocks portfolio features stocks that have the potential to move fast to the upside. Keep an eye on these.

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This article was written by a staff member of TheStreet.com.

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