Monkeys again beat Wall Street

[DARPA]

This is not a metaphor or business jargon. Everything must be understood literally.

Experiment with "monkeys investors", in which a simple monkey played up gurus of Wall Street the stock market reality.

Several years ago, a study commissioned by the University of Cambridge has shown that, historically, the perfect balance of long-term investor in the portfolio is achieved if 80% invested in equities and 20% in cash (or cash equivalents such as treasury bonds). At the same time it is necessary to reallocate the portfolio once a year.

And it turned out that if 20% of the money put on deposit in the bank, and the other 80% is distributed on shares that have chosen monkeys can earn quite a lot.

At the end of 2014, according to data Hedge Fund Research Inc., the average hedge fund lost 0.6%, while "portfolio monkeys" showed an increase of 2.3%. A year earlier, hedge funds showed returns of 6.7% and a monkey and a bank account earned 21%, that is, were three times more efficient! And in 2012 the monkey four times exceeded hedge funds, earning 13% compared to 3.5% in funds.

In other words, people who make a living studying a certain topic, make predictions worse than monkeys that randomly make a choice among the possible options.

Nobel laureate Daniel Kahneman smashed to smithereens forecasts so-called experts, as well as financial advisors and investors amateur in his book "Think slow and fast" (Thinking, Fast And Slow).

Kahneman came to the conclusion that people are particularly prone to "the illusion of mastery," when a very small experience gives them an excessive self-confidence. As a result, they make aggressive predictions and refuse to accept new information.



Although I am not a Nobel laureate, but every time I marvel at how different predictions can be financial experts. Winter jump in the dollar in Russia is clearly shown. And so every time. Forecasts, projections, forecasts, and as a result - the result is excellent all forecasts.

In the world there industry forecasts, the people have lost all higher meaning seeking solace in magic. Magic numbers. Coincidentally, hurray! You're the best financial analyst of the year!

In fact, the market and its invisible hand, this is such a tempting illusion. Which we are with you "feed" our liberal elite. With the capitalist financial system time to finish. Stop inflating or anything or anyone else provided financial "bubbles".

But to turn the steering wheel in the other direction need hefty "iron eggs" and correctly configured brains. Who they are, our Russian financial elite? The answer is obvious. Therefore, in the near future, we definitely do not expect the introduction of a planned economic system to a state-forming industries, banks and industry. And therefore the positive economic changes.