ProofTrader, Inc., the web's only collaborative stock picking site to assign a performance score to its financial bloggers, announced today that Ian Hall of Washington, D.C. is the winner of the first ever ProofTrader PT Score™ Challenge. He was awarded the $500 prize for his site-leading¹ PT Score of 49 as of May 14.

From November 2009 to May 2010, Mr. Hall was not only a savvy stock picker but a prolific writer for the site, cranking out 262 articles paired to specific stock predictions. Among his best picks were Jamba Juice (NASDAQ: JMBA) with a 77% gain over 170 days, IMAX Corporation (NASDAQ: IMAX) gaining 65% over 148 days, and a very timely short coverage of Blockbuster, Inc (NYSE: BBI) that netted 36% in just 31 days.

Among his most popular articles were those titled VLNC: Renewed Energy!, EVVV: The Vasco de Gama of Vascular Technology, JMBA: Juicy Fruit, GIII: Nothin’ but a G thing, baby, and HOTT: I can tell you shop at Hot Topic! In all, his articles have been viewed over 20,000 times. All this on a site that the world had never heard of before September 9, 2009.

Hall’s rise coincided with a rise in popularity for ProofTrader as well. Although still only getting their start in the growing world of social network-like stock picking sites, ProofTrader co-founders Mike Barkett and Josh Warner-Burke, both from Maryland, feel they have created a new genre. No other site requires its contributors to pick stocks with target dates and prices and write an article explaining their prediction. Combined with the PT Score, the article requirement differentiates ProofTrader from run-of-the-mill financial blogs and from traditional fantasy trading sites.

In essence, every ProofTrader member is a financial blogger and an analyst. Because of the blogging component, it hasn’t been easy attracting new contributors. “It’s a model where we’re saying to people, your opinions may be as good as any Wall Street analyst’s out there,” Warner-Burke said. “We require people to explain themselves, because we feel nobody’s going to sink their own money into a stock tip just because somebody told them to. We want people to think for themselves, and look at our site as a conversation, a dialectic.”

Indeed, the site now allows contributors to turn a comment on an article into a ‘reply coverage’ which is linked back to the original pick, so it’s like an ongoing conversation. But it is one in which the bloggers ‘put their mouth where their money is,’ as one of their taglines proclaims. The site presents lots of stock ideas, some that turn out well, some that turn out badly. Hall, for instance, has made plenty of mistakes, like going long on SmartHeat (NASDAQ: HEAT) and short on Ann Taylor Stores (NYSE: ANN) at just the wrong times. He also picked Domino’s Pizza (NYSE: DPZ) as a short in the article titled ‘Brownulated pizza?’ … right before Domino's announced a radical recipe makeover that invigorated their stock.

“I look at it sometimes as an idea buffet, you come, graze, take what you want from it,” Barkett said. With the PT Score, however, there is a situational reference point for the picks as well as the stock picker. The 1-100 score allows members to compare themselves to others, but more importantly, gives a reader a sense of context when reading an article. A higher score reflects past and present performance, and as such is no guarantee of future performance, but the idea is that some people are better at stock picking and market timing than others, and that plays out over time.

Sometimes one analyst’s bad pick is fuel for the fire for another’s good pick, as was the case when Hall picked Medifast, a Baltimore-based diet food company, in December 2009. It proceeded to fall 51% due to the questionable actions of a short seller named Barry Minkow, at which point Warner-Burke investigated a little and decided it was a buy. His pick made 20% in 14 days, and has proceeded to gain another 80% in the three months since. “The Medifast situation is a great example of how a little quasi-journalism can pay off nicely. It’s also an example of how other people can turn you onto a stock, even if they picked it wrong,” he said.

Perhaps the most surprising thing about winning, for Hall, is that he was never into stocks before finding his way to ProofTrader, and had never traded. “Part of the reason I was making so many picks early was, without trying to get a sense of the whole market, I wanted to see how all these companies I liked would do side by side. And yeah you can set up a portfolio on Google Finance, but you’re not attaching to it your reasoning, your thinking. With ProofTrader as you go along you can comment on your picks and have a kind of conversation with yourself (and others) that you can go back to and look at... which is more engaging than just looking at the numbers.”

What has he learned about picking stocks from this? “Patience is important,” Hall said. “And sticking with the things you know. Jamba and IMAX were gut picks based on what I envisioned happening in the real world, a combination of a gut feeling because I liked both of those products, and an educated guess based on real life experience, that they were trends. Much like someone would look at, say, Netflix early on and say, here’s someone doing something the best way it can be done, the first one with this product to market.”

Are there any companies he’s hoping will IPO? He mentions three: Forever 21, Pinkberry, and FourSquare. Pinkberry, he says, has a kind of “magic idea” like a Chipotle, they’re growing faster than their competitors, and they’re diving head first into social media, using technologies that are compelling to young people to build their brand.

About ProofTrader, Inc.

ProofTrader is the first website to combine unambiguously accountable stock market predictions with open source financial journalism. Every user on the site is considered an analyst, and while they are strongly encouraged to write thoughtful explanations for their picks, the performance of every pick is factored into their PT Score. Since its official launch in September 2009, the site has grown from the original two users to over 100 users and more than 20 active contributors. The PT Score algorithm, which is proprietary to ProofTrader, was invented by co-founders Mike Barkett and Josh Warner-Burke in 2007. The founders both graduated from Loyola University in Maryland, and they incorporated ProofTrader in January 2008. Additional information about ProofTrader can be found at www.prooftrader.com.