stonks + snacks = stacks? snonks???
February 17, 2021 12:31 PM Subscribe
Long before the internet, a local newspaper (it might have been The San Jose Mercury) did this yearly thing where they'd have some stock experts pick a handful of stocks. Then they'd have a monkey throw darts at the stock listing page. Then, a year later, they'd check the results.
Almost every year, the monkey would win.
posted by eye of newt at 7:33 PM on February 17, 2021 [5 favorites]
Almost every year, the monkey would win.
posted by eye of newt at 7:33 PM on February 17, 2021 [5 favorites]
Wow. Doing some searching brings up lots of people trying the monkeys and darts idea.
Here's one with chimps. They even created an index: the MonkeyDex. (But chimps are not monkeys!)
There was an analysis of the winning stocks in the one I remember. They figured out that a lot of the stocks that got picked by darts were 'sleeper' companies. These are companies that no one really pays any attention to--like companies that make screws or something like that. Since no one pays attention to them, few analysts will notice them and a lot of potentially good stocks get ignored...but not by the monkeys!
posted by eye of newt at 7:42 PM on February 17, 2021 [2 favorites]
Here's one with chimps. They even created an index: the MonkeyDex. (But chimps are not monkeys!)
There was an analysis of the winning stocks in the one I remember. They figured out that a lot of the stocks that got picked by darts were 'sleeper' companies. These are companies that no one really pays any attention to--like companies that make screws or something like that. Since no one pays attention to them, few analysts will notice them and a lot of potentially good stocks get ignored...but not by the monkeys!
posted by eye of newt at 7:42 PM on February 17, 2021 [2 favorites]
previously: rattraders.com (2014) (wayback machine)
> Ms. Kleinworth is about to press the button to go short in the Treasury Bond market.
> Right decision, Lehman02: He goes long in crude oil and collects his bonus.
> Lehman02 one more time: watch him as he trades crude oil futures. Lehmann02 has a 53% accuracy when trading, thus outdoing most of his human collegue's performances.
> STEP 3 DEVELOPING A PEDIGREE
> After extensive training, we wanted to find out if the talent in trading might be rooted genetically and crossed the top traders with each other. After only 20 days, we had 28 new rats (15 males and 13 females) , and we soon started to train again (even reducing the training time). The results were astounding: the second generation of top traders had a much better performance than their parents
posted by are-coral-made at 11:36 PM on February 17, 2021
> Ms. Kleinworth is about to press the button to go short in the Treasury Bond market.
> Right decision, Lehman02: He goes long in crude oil and collects his bonus.
> Lehman02 one more time: watch him as he trades crude oil futures. Lehmann02 has a 53% accuracy when trading, thus outdoing most of his human collegue's performances.
> STEP 3 DEVELOPING A PEDIGREE
> After extensive training, we wanted to find out if the talent in trading might be rooted genetically and crossed the top traders with each other. After only 20 days, we had 28 new rats (15 males and 13 females) , and we soon started to train again (even reducing the training time). The results were astounding: the second generation of top traders had a much better performance than their parents
posted by are-coral-made at 11:36 PM on February 17, 2021
Two fundamental truths about return on capital always being calculated as a percentage:
1. Maximum you can lose on any investment is the amount you bought in with (except short sells. Don't do those.)
2. Maximum you can gain on any investment is essentially unlimited.
Therefore, the correct strategy is to spread your investments over a wide range of stocks in companies that appear to be well managed, operating in a diversity of market segments you're convinced have got a future, then do nothing for as many years as it takes to become clear to you which of your picks have turned out to be winners and which were duds.
There will always be some duds. In general it's not possible to predict which of your picks those will be.
If more than about a third of a diversified portfolio turns out to be winners, you'll make a positive return. More than half and you'll do very nicely. Two thirds or more and people will be hailing you as the new Oracle of Omaha.
Of course, the real trick is to do all of the above with a shitload of money to start with. Choose your parents wisely.
posted by flabdablet at 12:58 AM on February 18, 2021 [3 favorites]
1. Maximum you can lose on any investment is the amount you bought in with (except short sells. Don't do those.)
2. Maximum you can gain on any investment is essentially unlimited.
Therefore, the correct strategy is to spread your investments over a wide range of stocks in companies that appear to be well managed, operating in a diversity of market segments you're convinced have got a future, then do nothing for as many years as it takes to become clear to you which of your picks have turned out to be winners and which were duds.
There will always be some duds. In general it's not possible to predict which of your picks those will be.
If more than about a third of a diversified portfolio turns out to be winners, you'll make a positive return. More than half and you'll do very nicely. Two thirds or more and people will be hailing you as the new Oracle of Omaha.
Of course, the real trick is to do all of the above with a shitload of money to start with. Choose your parents wisely.
posted by flabdablet at 12:58 AM on February 18, 2021 [3 favorites]
This is why you don't day trade, kids.
posted by East14thTaco at 5:51 AM on February 18, 2021
posted by East14thTaco at 5:51 AM on February 18, 2021
"...you can make a slick rat stonk snack
you can make a slick rat snonk stack..."
posted by 20 year lurk at 8:21 AM on February 18, 2021
you can make a slick rat snonk stack..."
posted by 20 year lurk at 8:21 AM on February 18, 2021
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posted by Orange Dinosaur Slide at 6:54 PM on February 17, 2021 [1 favorite]