The Million-Dollar Waitress

A woman who has never bought a stock in her life bested the financial pros in CNBC's stock-picking contest

by Tim Catts

Mary Sue Williams, a waitress from St. Clairsville, Ohio, is the winner of CNBC's $1 million stock-picking contest

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Editor's note: It was a very lucky Friday the 13th for Mary Sue Williams, the Ohio woman BusinessWeek profiled last month as the likely winner of the $1 million grand prize in CNBC's Million Dollar Portfolio Challenge. CNBC confirmed Williams' stock-picking prowess (and luck) on July 13, featuring her on the network with investment professionals offering advice on what to do with her bounty. Below is the initial BusinessWeek story on Williams.

It's Friday afternoon in the tiny Appalachia town of St. Clairsville, Ohio, and Mary Sue Williams is about to begin her shift as a waitress at Undo's, a spacious Italian restaurant that overlooks Interstate 70. She enjoys taking care of her regulars, she says, and after nine years in her job, she has accumulated plenty of them. Even with dozens of the restaurant's tables empty, she cuts quickly across the floor to the bar to refill an empty water glass. "I'm going to do this until I can't walk," Williams says, insisting that she wouldn't quit for a million dollars.

That conviction may soon be put to the test. Williams could be in line to win the stock-picking contest sponsored by cable channel CNBC, which carries a million-dollar grand prize. According to the last official standings, posted on May 25, she was in sixth place, with a 17% return during the two-week final round. But as BusinessWeek first reported, a handful of top finishers are suspected of exploiting a loophole in CNBC's trading software to inflate their returns (see BusinessWeek.com, 6/7/07, "CNBC's Easy Money"). CNBC later acknowledged the problems and said it will disqualify contestants who violated any of the game's rules. Based on BusinessWeek's analysis of the trading results for the contest's finalists, Williams appears to be the most likely winner.

Mother-in-Law Knows Best

It would be a fairy-tale ending for a contest wrought with drama and controversy. Williams, 46, has been a waitress for 20 years and was a welder before that. She has never bought or sold a real stock in her life. In fact, she says she never even paid much attention to the markets before signing up for the challenge. Yet Williams has already bested thousands of financial professionals who entered the contest with Ivy League degrees and complex trading models. "Part of this was luck," she says. "A lot of it was a gut feeling, some eenie-meenie-minie-moe, and common sense."

A victory for the little guy? Well, yes. But it's also sign of what Paul Auster once called the "music of chance." Picking stocks is about luck as much as strategy. In a field of 375,000 contestants with 1.6 million portfolios, someone has to finish first. Lubos Pastor, a finance professor at the University of Chicago's Graduate School of Business, says that in a contest like CNBC's, with a short time horizon, there's no reason that the pros should have any advantage over novices armed with smart strategies and good fortune. "If you have 1,000 people flip a coin 10 times, one of them is going to get 10 heads in a row," he says.

Williams and her husband, Mark, entered the contest at the urging of his mother. "I watch CNBC all the time and I thought, 'Oh, this might be interesting for them. They might learn something about the stock market.'" says Lauretta Williams, 79, a retired nurse who lives about 10 miles away in Wheeling, W. Va., and does some long-term investing through a Charles Schwab (SCHW) account she's had since the mid-1990s. Though she and her husband have had a computer with Internet access since their 50th wedding anniversary last year—their children gave it to them as a gift—Lauretta says she didn't sign up because she "just didn't want to spend the time with it."