The fund works like this: stock trades are carried out by an Automated Trading System (colloquially, a “robot”), which is a computer program that buys, sells or holds stocks based on a set of specifications encoded into the program’s governing algorithm. The code for Chung’s experiment was written by Jim Hunt, who runs a firm called Trading Gurus, and together with Chung they named it “Sid the Superstitious Robot”. (They also decided to make the source code completely transparent and free to download.)
Like many investment models, Sid is an automated speculator. But whereas other algorithms might take action based, for instance, on a stock’s recent performance or the price of oil, the criterion for this program are lunar phases and the affection and disaffection people have for certain numbers. “I wanted it to operate based on human characteristics,” Chung says.
Sid won’t buy anything on the 13th of the month, and steers clear of buying or selling any stock if its value happens to have a 13 in it. As for lunar phases, Chung explains with a hint of pride that the algorithm finds a new moon to be “good”, whereas a full moon is very, very bad. “The closer the moon is to being full, the more it effects us,” Chung says. So as the full moon approaches, the robot – instead of starting to grow claws and thick brown hair – sells more, as if it is nervous about the moon’s impact on multinational corporations and the decision-making capabilities of senior management. If you’re wondering how this automated yet temperamental trader handles an eclipse, one word: sell.