Author Topic: Article on Rat Traders  (Read 1977 times)

Glenstache

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Article on Rat Traders
« on: October 16, 2014, 09:58:59 AM »
In case you thought hedge funds were special:
http://www.theatlantic.com/business/archive/2014/10/the-artist-who-trained-rats-to-trade-in-foreign-exchange-markets/381456/

I found this amusing, and a good ego check on overly sophisticated investment strategy based on stock market prediction.

arebelspy

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Re: Article on Rat Traders
« Reply #1 on: October 16, 2014, 04:17:15 PM »
Heh, that was awesome.

My favorite part wasn't even the rat experiment, though that was cool, it was this:
Quote
The money manager and author David Leinweber once sought to prove the coincidental nature of predictions by seeking out any historical data that miraculously aligned with the stock market at the time. Finally, he found a promising indicator: Butter production in Bangladesh could be used to predict the variation in the S&P 500 index with 75 percent accuracy over the course of more than a decade. When he factored in U.S. cheese production and the number of sheep in the U.S. and Bangladesh, his accuracy shot up to 99 percent over the same period. After writing about the Bangladeshi butter correlation his book, Leinweber told The Wall Street Journal that he received several requests from overeager traders hoping he would distribute his data. ďA distressing number of people donít get that it was a joke,Ē he said.

Thanks for sharing!
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deborah

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Re: Article on Rat Traders
« Reply #2 on: October 16, 2014, 05:42:59 PM »
Heh, that was awesome.

My favorite part wasn't even the rat experiment, though that was cool, it was this:
Quote
The money manager and author David Leinweber once sought to prove the coincidental nature of predictions by seeking out any historical data that miraculously aligned with the stock market at the time. Finally, he found a promising indicator: Butter production in Bangladesh could be used to predict the variation in the S&P 500 index with 75 percent accuracy over the course of more than a decade. When he factored in U.S. cheese production and the number of sheep in the U.S. and Bangladesh, his accuracy shot up to 99 percent over the same period. After writing about the Bangladeshi butter correlation his book, Leinweber told The Wall Street Journal that he received several requests from overeager traders hoping he would distribute his data. ďA distressing number of people donít get that it was a joke,Ē he said.

Thanks for sharing!
You never know - the butter produced in Bangladesh together with the US cheese and a bit of roast lamb might be part of a sandwich meal that causes sharebrokers to have a more positive view of the world, and thus encourage them to pay more for the same stock!