As the slide starts and the stock markets open in the red on the 1st August , it’s now time to take into consideration what it is that will save you on the floor from losing the house, the wife and the kids because you didn’t know how to deal with the stock crash that’s on its way. Of course, study, research and believe that it’s a rocket science but we all know that it’s not. Create algorithms and use fancy computer programs, even pay someone to do the dirty investing for you. But, when it boils down to it, it’s lady luck that will make you a winner or a looser. And, I’m not the only one that thinks so. There are a good many people in the past that have used anything and everything they could lay their hands on to bring them luck in the financial world. Here are just a few of them.
The superstitious Wall Street guys
You wouldn’t have thought it in the digital age but there are some that are playing with the money of the rest of us on the stock markets using lucky charms and superstitious beliefs. Isn’t this supposed to be 2014?
There was the trader Frank ‘Tony’ Ciluffo at Steinhardt, Fine, Berkowitz that what he had for lunch had an impact on the stock market. That’s enough to give you indigestion alone, isn’t it? He had two toasted English muffins with jam for an entire year because the first day he had them he made a killing. He carried on eating them day in and day out until he’s luck bottomed out and he had to change to cream-cheese-and-olive sandwiches. Any nutritionist would be reeling by now, but investors think it’s probably good in that quirky retro way.
Apparently, you should never sell while your stock is going over $90. There’s the common belief that if it hits $90, it will hit $100 before dropping, so you might as well stick it out and make a few more dollars for the champagne parties. There’s nothing to prove it whatsoever. But, if they are all doing it, they are all increasing the stock artificially, anyway.
There are those that force their traders to take female hormones because women make better decisions that are less violent which means less viable to risk (2007, Andrew Tong that filed a lawsuit against his boss Ping Jiang). But, there are also the traders that down the testosterone boosters after they hit 30 so they can keep up with the wolves that are just entering the pack. It reduces sluggish decisions and increases stamina and nerve.
At Murray & Co there’s a trader that things that the tidier the desk he has, the more money he will make. Oh, and he never uses a red pep either, because that’ll bring bad luck and look like loss. In the real world that would be a compulsive obsession disorder, wouldn’t it? Don’t you get put under a doctor for that? But in the world of investment, it’s the norm. The mad hatters are on the inside in this story, running down a hole to catch the money at the bottom of the pit.
Then there’s the superstitious bathroom stall at the Chicago Mercantile Exchange that nobody wants to use because it leads to the trader losing money. What more can you say?
It has been proven by research that when there is an environment of risk, a perceived lack of control and high stakes that are in the bidding, then people resort to superstition. Superstition-induced behavior is and has always been part and parcel of the investors on Wall Street. There was even that Superstitious Fund started in 2012 by Shing Tat Chung. The idea was to get investors to put money into a portfolio that was completely generated and managed by a computer program that took into consideration only things that were related to superstitions. That means that the robot steered clear of Friday 13th and anything that had the number 13 in t, for example. Or, it bought when the new moon started but when it was full-moon time it stopped everything. 144 people invested £4828.88 and it traded on the FTSE100 for a year. Before you run out to buy the rabbit’s foot, remember that the Superstitious Fund closed down over 16%. There might be weirdoes out there with their quirks that always tie their shoe left shoelace before the right one and then think they are going to get the dollars pouring in, but remember, they are only better off until they start losing.
Isn’t that how banks went bankrupt, believing that they would never lose any money because they were on to a winner?
Everyone wants to be a smart trader these days.
The next Friday 13th is now February 13th 2015, so you have some time to buy those shares still.
Originally Posted: Lucky Charms on Wall Street [2]
