Bungalow 8

Sometimes you can causally or process trace an interest to a specific event that involved others. I have written in the past about how I encountered the legendary Anglo-French financier Sir James Goldsmith. This was likely a remanifestation of Goldsmith’s career arc in the 1980s merger wave. James B. Stewart reveals in his book Den of Thieves (New York: Touchstone, 1992) about the 1985 Predators Ball hosted by Drexel Burnham Lambert:

 

But those thoughts quickly vanished, for far more important matters were brewing that night in Bungalow 8. Boesky was in a corner talking quietly with Icahn; Sir James was in a group with Pickens and Flom. Murdoch and Lindner were chatting with Kay and Engel, the affable host. Within only a few weeks, Pickens would launch his bid for Unocal, Peltz would bid for National Can, Sir James would attack Crown Zellerbach, and Farley would go after Northwest Industries—all with Drexel financing. (p. 138).

 

Goldsmith’s Crown Zellerbach bid used greenmail and white knight practices (pp. 160-161). It led to renewed media interest in his work . . . which eventually led to my encounter with his work in 1995, and to revisit it in 2010.

2nd August 2012: A Superstitious Fund

A Superstitious Fund

BoingBoing‘s Mark Frauenfelder alerted me to Shing Tat Chung‘s Superstitious Fund project:

 

The Superstitious Fund Project is an investment Fund that is run by a superstitious autonomous Algorithm. As a one year experiment it operates and trades purely on superstitious beliefs. Buying or Selling on Numerology and in accordance to Lunar Phases. For example it has the fear of the number 13 and a full moon. It also develops its own lucky ad unlucky values, just as we do all the time. We are hardwired to imagine patterns that give us the illusion of control. Win a tennis match, and we’ve got lucky socks. The Algorithm creates these patterns throughout the year, ranking and deranking superstitions. They are then used as a new logic in trading.

 

Chung’s MetaTrader 4 script is here (details) and BBC news coverage is here.

 

There is potential here to develop a Bayesian learning approach to how metaphysical, religious and spiritual beliefs shape investor decision-making and preferences. For instance, followers of W.D. Gann rely on much-debated market astrology which is rejected by other technical analysis practitioners and by quantitative hedge funds. Richard Tarnas‘s archetypal astrology is an alternative to Gann’s approach on cultural history and cyclical events. Steven Sloman and Judea Pearl‘s work on Bayesian networks, causality, and uncertainty provide a potential, scientific approach — which could then inform the development of machine learning algorithms.