A ginger tabby named Orlando beat a team of investment professionals and a group of students in a year-long stock-picking experiment conducted by the British paper The Observer. Orlando picked his stocks by throwing a toy mouse at a grid of companies, while his human opponents possibly used methods involving “research” and “thinking.”
At the end of the year, Orlando’s picks had returned nearly 11 percent, while the pros had gained just 3.5 percent. The students lost money on the year. (In comparison, the Standard & Poor’s 500-stock index rose 13 percent last year; they all would have been better off just buying an index fund.)
Orlando joins a long list of famous stock-picking animals that have made stock-picking humans look ridiculous through the years. They include Adam Monk, the cinnamon-ringtail monkey who successfully picked stocks by circling their ticker symbols in the newspaper, beating the market and shouty CNBC personality Jim Cramer.
Then there’s Lusha the Russian circus chimpanzee, who reportedly beat 94 percent of Russian investment managers one year by picking cubes with company names.
I just started reading Nate Silver’s book, The Signal and Noise. So far it is interesting, but it seems to rehash many of the points Future Babble made about the fallacy of predictions. And I’m pretty sure that at least every other book I read cites Philip Tetlock and/or Danny Kahneman. This topic seems to be amply discussed.