Bad Monday: Shrimp, Fingers, Brains
2024-05-24 00:34:55
<p>The audio companion to Bloomberg Opinion’s beloved Money Stuff column hosted by its author Matt Levine, “whose deadpan style mixes technical elucidation and wit” (NY Times). Once a week, Matt and his friend, Bloomberg News reporter and TV host Katie Greifeld, talk about Wall Street, finance and…other stuff. New episodes every Friday.</p>
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I'm Maria Konnikova. And I'm Nate Silver. And our new podcast, Risky Business, is a show about making better decisions. We're both journalists whom we light as poker players, and that's the lens we're going to use to approach this entire show. We're going to be discussing everything from high-stakes poker to personal questions.
Like whether I should call a plumber or fix my shower myself. And of course, we'll be talking about the election, too. Listen to Risky Business wherever you get your podcasts.
Bloomberg Audio Studios. Podcasts, radio, news.
We're starting with light fare. Yeah.
You know? Light breaded fare.
Yeah. Lightly fried. Well, probably deeply fried. Lightly breaded, deeply fried.
Lightly breaded. All right. Hello, and welcome to the Money Stuff Podcast, your weekly podcast where we talk about stuff related to money. I'm Matt Levine, and I write the Money Stuff column for Bloomberg Opinion.
And I'm Katie Greifeld, a reporter for Bloomberg News and an anchor for Bloomberg Television.
What do we got today, Katie?
We're going to talk about shrimp and lobsters. All the fare of the sea. We're going to talk about fat fingers and why Citigroup keeps having problems with those. And then we're going to talk about brains.
It's going to be a good one.
Yeah.
Red Lobster. Did they really shrimp themselves to death?
No. Maybe a little bit.
But isn't it fun to pretend?
It's more fun to pretend than almost any other thing I've pretended about. So Red Lobster filed for bankruptcy over the weekend. And why did they go bankrupt? Well, you know, they, like, had a series of business mistakes. They had some onerous leases that they got in connection with the leverage buyout, changing consumer tastes.
Inflation is rough on fast casual dining.
Those are all boring.
Yeah. No, the real answer is that their equity owner is a company that is also one of their big suppliers. It's a seafood company called Thai Union. And Red Lobster, under its former CEO, embarked on an unlimited, endless shrimp promotion where, for $20, you can get all the shrimp you wanted all the time. And in the bankruptcy papers, the new CEO, who kind of like works on behalf of the creditors, sort of insinuates that there is a scheme to pump shrimp through Red Lobster to make money for Thai Union at the expense of Red Lobster.
To just line the pockets of Thai Union. Well, it did turn into. they were the only shrimp supplier for Red Lobster. Didn't? they start out with three, and then it whittled down to just Thai Union?
It's not exactly clear. But yeah, the suggestion is that, like there were some irregularities in the procurement process where they got rid of some of their other shrimp suppliers and ended up sending more and more money directly to Thai Union for more and more shrimp.
And Thai Union, of course, disputes that passionately. They say that all of those issues concerning the company and its relationship to Red Lobster, you know, are basically false. But it is interesting that this started out as a limited promotion. And then I think it was May 2023, actually, it turned into a permanent promotion. This endless shrimp fiasco.
It just makes sense. Yeah. That if you own a company that is going under, and by like February this year, Thai Union is saying the value of their equity is zero. If you own a company that's going under, you get as much money as you can out of it. And if you also sell that company's shrimp, the goal is to sell them as many shrimp as possible.
They did end up losing $11 million on it, which is not huge, in the grants.
It's not huge. It's like a $2 million revenue.
It is a lot of money to lose on shrimp, though.
I mean, I certainly haven't come anywhere close to that.
No, it is a lot of money to lose on shrimp, but Red Lobster, the bankruptcy filing, has a lot of good stats, including they're like 20% of the total market for lobster tails.
like in the world.
So yeah, I mean, if anyone is going to lose $11 million on shrimp, it's definitely Red Lobster. But that's probably not enough to drive them into bankruptcy, but it is enough to be very, very funny in bankruptcy.
It made for some amazing headlines, some amazing thought pieces, some amazing money stuff, columns. Let's talk about the leases, though, because a lot of people are pointing to the leases.
as.
. Sure, sure, sure. Like. the boring answer is that there's a sort of classic private equity stripping story where it's like, you know, they were owned at one point by General Mills, they were owned by, like Darden, a restaurant company, and they were sold in a leveraged buyout where basically the buyer, to finance the deal, sold a lot of their locations and leased them back. And so they entered into a lot of expensive leases.
And when hard times came, they didn't own their own real estate, and so they had a little bit less financial flexibility because they had all these lease payments. And so that was also hard on them. I'm always like skeptical of these explanations, because it's like, that would have worked out fine had business kept improving, right? And it worked out poorly because business was declining. Like it adds leverage, right?
It lowers your margin for error. But like, it seems, like the explanation here is not like Red Lobster was doing great and then, like financial shenanigans, destroyed it. The story is like Red Lobster is not doing that great, and the financial maneuvers gave it less of a margin for error. But like, ultimately this is a changing consumer tastes story. And it turns out the consumer tastes were not for that many shrimp.
That's true.
Although the funny thing is like, in conjunction with like these stories about Red Lobster's collapse, you do also read a lot of anecdotes about people eating 180 shrimp at a time.
I mean, why wouldn't you?
For reasons. But, like, you know, but someone will.
I mean, shrimp, I don't like shrimp, but shrimp are kind of the perfect food if you're just trying to get a lot of protein.
It is true that if I were to eat 180 of a food, it might be shrimp.
Yeah, come on.
But like when Red Lobster advertised all the shrimp you could eat, that attracted some number of people who were like, oh, I can eat a lot of shrimp. Red Lobster.
And it probably did get people in the door, but there was a really.
It might get negative margins.
Yeah, exactly. And there was a fun Bloomberg news piece, just talking about the state of the restaurant business right now. I don't think it's any surprise that inflation is still pretty high, pretty sticky. The absolute level of prices is much higher than it was. And you have all of these restaurant chains who, you know, their businesses are in much better shape than Red Lobster, but they're just going for these promotions.
You think about Applebee's has one dollar margaritas right now, which I actually would like to try. I can't imagine. there's much alcohol. And then Chili's has recently introduced the Big Smasher. It's part of its broader campaign to have three menu items.
You put them all together. They cost $11.. Stay with me here. Anyway, and then they...
Wait, when you say you put them all together, like on a plate, or like when you say, like, do they actually, like in a blender?
No, definitely not that one. Like you order three menu items and all together it costs like $11.. But then they quote this man. He's the CEO of Aaron Allen and Associates. It's a restaurant consulting firm.
And he says that these chains sabotage themselves by trading down just to get cheap hits. It's like taking grandma's jewelry to the pawn shop just to get a few quick bucks. And I guess that's kind of what Red Lobster did.
Are the jewels the lobsters in this scenario?
I think they're the shrimp. I don't know.
I'm torturing this metaphor.
No, I think it's like the brand equity or whatever. Yeah.
And so I don't know. I feel like it was a whole host of factors. It's probably crushing the entire restaurant industry right now. It's sort of the fast casual space. Those financial maneuvers that you described.
Yeah. I just, I love the idea that there is a shrimp conspiracy. Yeah. She's like, right. There are a lot of factors that are affecting all of the competitors, but, like here, there's the specific factor that they're owned by their supplier.
And so it's like, we can just pump shrimp through the Red Lobster system.
No one will ever know.
No one will ever know, except for the CEO.
Who put in place the CEO? Was it Thai Union?
Well, so the old CEO, Thai Union, and the allegations now are that he was in the pocket of Thai Union. But no, the new CEO is from Alvarez and Marshall. He's like, basically part of the restructuring team. So he like kind of works for the creditors. And you know, I wrote in my column in the first day of the bankruptcy filing, he writes this statement sort of alleging that Thai Union was doing all this stuff to stuff shrimp through the system.
And I wrote that, you know, in his position, quote, you cast a wide net for possible ways to claw back money for creditors, which I didn't really intend as a lobster pun, but, like several readers pointed out, claw.
Terrible. That's just terrible.
But no, I mean like he works for the creditors and like they need to find as much money as they can. And like to the extent millions of dollars went out the door to pay Thai Union for shrimp, you have some case to say it shouldn't have done that. And like that was a violation of their duty to the company and get the money back.
I mean, the fact that Thai Union appointed the CEO and then whittled it down.
Whittled it down to the owner of the company.
I know, but still, and then whittled it down to be the sole supplier. If they were one of several, maybe that would be a better look.
It's definitely something that looks like a conflict of interest.
It certainly does. What I'm unclear on is whether the promotion, it's not still going on. Could you and I go to the Red Lobster in Times Square right now?
I was thinking about trying to record this podcast from Red Lobster, but I thought they shut down a lot of the restaurants.
But the one in Times Square is still open. I know that because Bloomberg News actually sent some reporters there and had them-.
Did they get the shrimp?
They interviewed a lot of guests and-.
Did they get the shrimp?
That was not in the article.
I should go to Red Lobster and not, at this late date, going to Red Lobster and not ordering the endless shrimp.
I know. I know. It wasn't in the article. I feel like we need a little bit more on the ground reporting. But if the shrimp promotion is still going on- I don't eat shrimp, but I would choke down.
Maybe not 180, but-.
I will say, this is less funny than the shrimp, but people email me about this. There is this analogy to the AI investing boom.
Oh my God. I know. I know. Go ahead.
I know. There's this article from Apoorva Agrawal a couple months ago about large language model AI startups. A lot of their investors are big cloud and chip companies like NVIDIA and Google, and Amazon and Microsoft. He wrote this article being like, there is a weird tension there because these companies are investing billions of dollars in these AI startups, but a lot of that money is going right back to the cloud providers in the form of paying for chips or paying for cloud compute. When NVIDIA or Microsoft invests in an AI startup, they can say, I'm putting in a billion dollars at a $10 billion valuation, but it's getting most of that money back.
It's going to the supplier's bottom line. He argues that's bad for venture capitalists in that space, because the valuation of these companies is being driven up by people whose interest in the company is not just being an equity investor, but is also being a supplier. There's conflicts of interest where, if you are Microsoft or NVIDIA and you're a big shareholder in these AI startups, you're on the board, you have control over this company, you might make decisions that are in your best interest as a supplier and not necessarily in the best interest of the company or the other investors, because your money is not really an equity investment. It's really about finding customers for your cloud compute power. Similarly, with the shrimp.
Yeah.
I was going to say I was skeptical, and then actually that is a really neat parallel that.
you just described. Yeah, and I think in most of these cases, these companies are not the controlling shareholder appointing the CEO. Usually there's some independent. ... The startup has its own business model, but right, I mean there are conflicts of interest there where if you're a big supplier, a big exclusive supplier, a lot of the equity investment is going directly to you.
Your interest is maybe less as an equity investor and more as a supplier.
I will say imagining an executive with semiconductor chips falling out of his pockets and his briefcase is definitely not as much fun as shrimp, but that does make a lot of sense.
Right. You hope that ... This is like in the earlier stage where it's not as fun. You're not like, oh, they're stuffing computing power into these AI startups, right, because they're all trying to make money. They're all optimistic and hopeful.
It's not like Red Lobster with sort of the end of the run, but I don't know.
Food for thought. Some shrimp for thought.
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I'm Maria Konnikova. And I'm Nate Silver. And our new podcast, Risky Business, is a show about making better decisions. We're both journalists whom we light as poker players. And that's the lens we're going to use to approach this entire show.
We're going to be discussing everything from high-stakes poker to personal questions. Like whether I should call a plumber or fix my shower myself. And of course, we'll be talking about the election, too. Listen to Risky Business wherever you get your podcasts.
From shrimp to fatfingers. This is a sad story.
No, it's a great story.
I mean, it is about human error, and who among us hasn't accidentally tried to sell $444 billion worth of equities all at once?
No, it is the most natural mistake you could possibly make.
Why don't you walk us through the worst 14 minutes of this trader's career?
Okay, so there's a trader at Citi in London, apparently working from home.
On a Monday holiday.
On a Monday bank holiday.
Talk about a bad Monday.
So this trader works on the Delta One desk at Citi to hedge an index futures order, has to sell a big basket of stocks on 13 different European stock exchanges, pulls up the order management system. There's like a box where you enter the quantity you want to sell. Actually, there's two boxes. You can enter the quantity in terms of like units, basically like shares of the index, or you can enter the quantity in dollars. This person wants to sell $58 million, enters 58 million in the shares field, and therefore sells 58 million units, which is, you know, $444 billion worth of stocks.
So fills out the form. And then this is the amazing part to me. The order management system displays, you know, 58 million units, but then also displays a dollar amount. But instead of displaying $444 billion, which is the actual dollar amount, it displays negative 58 million.
Because in that field that like pulls in from an external pricing source, and the pricing source is like turned off that morning, because I don't know, because the market's not open or because of the bank holiday or whatever, the pricing source is turned off. And so Citi's system says, oh, the pricing source isn't available. So we're going to default to negative $1 as a price for each share, right? So the trader types in 58 million shares, and the thing pulls in a price of negative 58 million. So the trader looks at that and says, yes, right, I wanted $58 million.
It's showing me $58 million. Now there's a minus sign, but everything is like, no one knows what the sign is supposed to be on any of these systems. And so the trader's like, yes, okay, $58 million, just like I thought, clicks okay. The next thing the system does is pops up 711 warning error messages saying, are you sure you want to sell, you know, a billion dollars worth of stock in Sweden? Are you sure you want to sell a billion dollars worth of that stock?
And the trader, first of all, only sees 18 of these messages, because you have to scroll down to see the other 600.
And why would you?
And why would you? And secondly, yeah, it was a big order, whatever, I'm clicking yes. So trader clicks yes, then it shows like a final confirmation, like, do you really want to sell? And at this point it has crossed off half of the orders. It's like half of these orders, even Citi's somewhat janky system knows that it should not sell, you know, more than $2 billion worth of any stock.
So like all the stocks that has to sell more than $2 billion worth, it cuts out. But still it says, okay, fine, do you really want to sell $196 billion worth of stock? And at this point the trader says, sure. And clicks yes. And off.
Citi goes to sell $196 billion worth of stock, which causes a flash crash in like a bunch of different European stock markets.
Yeah. I mean, it's just amazing. Hearing you describe it makes my blood run cold. I do like to think that somewhere along that line I would have stopped myself, but one never knows.
I got a lot of emails from people being like, this person should have stopped themselves. I tell you, I know at this point from my own computer use, I know enough about myself to know I would not have let the error messages, you know, because you're an experienced trader, right? You've done this. before. You fill out the form, you see the form show you $58 million.
You're like, yes, click yes. And then you get like seven more click buttons that, to you, are just a waste. They're like, okay, I've already checked it. It's already yes. Yes, yes, yes, yes, yes, yes.
And you just click. You don't look. Yeah. I think is what happened here. I'm not responsible for trading tens or hundreds of billions of dollars of stocks across Europe, but like I click yes all the time, man.
I mean, I think about, like my own stupid mistakes. I don't have anything of this magnitude, but like sending an instant Bloomberg message to the wrong person, making typos, et cetera. It happens. What is amazing, you described it as Citi's somewhat janky system. It wouldn't have happened in New York necessarily, but it did happen in London.
They had hard limits on how much you could sell at one time in New York, not in London.
And the natural question is why, but I don't know if you have that answer.
I don't know the answer, but you know, everything is like silent and hierarchical, and some people put it in place and some people don't. and you know, I don't have a good answer to why, but one boss put it in, one didn't.
This in and of itself is amazing, but it's even more amazing when you think about Citi's history, which you write about, and you think about what happened with Revlon, for example, because it hits a lot of the same notes.
Yeah. I mean, the Revlon thing, Citi was like the administrative agent on this big loan to Revlon and like there was a sort of fight over whether Revlon was in default. And as part of that fight, Revlon meant to pay like $7 million in interest to a couple of hedge funds. And instead Citi paid $900 million, paid back the loan in full. And then Citi was like, oops, can we have the money back?
Like half of the lenders were like, sure, here's the money back. And half of them were like in this fight with Revlon and were like, no, we're keeping the money and going to court. They kind of went in court and eventually lost. But in the court decision in loving detail describes how Citi messed this up and it's just incredible. Like they had this system where, like, the only way for them to make this interest payment was for some reason, to pay off the entire principal of the loan.
And Citi's like, well, obviously I want to do that. No, it's okay. You can pay off the entire principal to like a fake memo account. So the system thinks it's paying off the entire principal, but it's not really, no money is going out the door. And Citi's like, sure, that sounds great.
Let's do that. Right. Which is first of all, like a terrifying thing to agree to. But then, secondly, in order to have it only be paid to a fake account and not actually go out the door, you have to click like three boxes, and one is like pay the principal to the fake account. And you're like, okay, click the principal box.
And then the other two are like just bizarre buzzwords. And so, like the three people, it's three people had to do this, the three people signing off on the Citi thing, like, yep, the right box is checked. But then they didn't check the other two boxes that were more complicated. And so they sent out $900 million by accident. And then, when they saw that it had gone out, they called tech support and were like, the system isn't working.
And ultimately it turned out. the system was working, but, like, you know, the system was terribly designed.
Right. And that happened in 2021.. Yeah. This trade happened in 2022.. So maybe.
Maybe it's all fixed.
Maybe it's all fixed. It's all fine. I thought it was an interesting size and scope. So ultimately they were fined $78 million. And apparently, when regulators were thinking about how big the fine should actually be, they were thinking about how much it cost them in part.
So basically, the bank's Delta One division had generated roughly $612 million in the nine years leading up to this trade, an average about $68 million a year. So you layer on the fines and the trading losses from that day. And that trade cost those desks nearly two years of revenue, which is pretty painful.
That's terrible. That's so sad. Two years.
Two years and 14 minutes.
That's so sad.
It is so sad.
It's so sad. Everything you work for and you put like one number in the wrong box and it's like, it's all, all goes up in flames.
I always think about that when you read stories like this, about someone who just makes a human accident, some unintended pilot error, no malicious intentions, and just it's all over. And I always think about, like the months and the weeks leading up them, going about their lives, not knowing that this cataclysmic event was going to happen. And here we are. And Bloomberg News has reported that this trader doesn't work at Citi anymore.
I'm not that surprised. But I will say this fine and even this loss are not about the trader. putting the number in the wrong box. Like this is a system design issue, right? Like.
the problem here is like, yes, putting the number in the wrong box, but like having a system that, like the computer, also got confused between the number of shares on the dollar and the amount, right? The computer was like, oh yeah, they're all worth $1 a share, right? Like, wrongly. But then also, like the after trade checks were just not effective, right? In New York they would have blocked this trade automatically.
Even in London, like if you're popping up 711 error messages, it's like, maybe make a bigger one.
But all that being said, do you think that any of the other banks who could potentially hire this trader are thinking that way, or are they?
Yeah, I would hire this trader.
Really? Yeah.
That's not like on the list of like.
Well, they're probably never going to do it again.
Right. One, they're never going to do it again. And two, like look, obviously people care a lot about attention to detail, but like there are other skills and like probably everyone would mess this up once. It's just that if they have better software to catch it, they won't actually cost the bank $100 million.
Yeah. Make better software.
I think that's the answer, this poor trader. Now I feel really bad.
Yeah. This was kind of a bummer.
I do think the other thing that's amazing in this case is that the risk managers, who are directly responsible for oversight of this, like their job was to catch this, they went on vacation eight minutes before the trade happened.
That is wild. I mean, just the timeline of this whole thing, but the eight minutes, that seems like almost unbelievable.
I'm exaggerating when I say they went on vacation. What happened is that, like the handoff from like the right team to the wrong team happened eight minutes before this trade, which I think must mean that the right team in like Asia was handing it off to the wrong team in London because the right team in London was out for the bank holiday.
Yeah.
But in any case, right.
They probably sent that email, slammed the laptop shut, and then they literally were on vacation. Yeah.
Yeah. I wonder if they got in trouble.
I don't know. I don't know.
I'm Maria Konnikova. And I'm Nate Silver. And our new podcast, Risky Business, is a show about making better decisions. We're both journalists whom we light as poker players, and that's the lens we're going to use to approach this entire show. We're going to be discussing everything from high stakes poker to personal questions.
Like whether I should call a plumber or fix my shower myself. And of course, we'll be talking about the election too. Listen to Risky Business wherever you get your podcasts.
This is the section of this podcast that I have the lowest expectations for.
Your nucleus accumbens is not lighting up at this one.
I was hoping that you.
The section of your brain that anticipates rewards.
I did Google that, and the definition was something along those lines. And then it said it was an incomplete definition. to just think of it as like the reward center of your brain. But I don't know what it is.
No, I have a much more nuanced understanding of the nucleus accumbens that I will not share with you.
Very good. Very well.
So.
. I know all about the nucleus accumbens.
We're in this situation again where we're recording this podcast before your newsletter on this topic has come out. I read the actual paper, and I got to say, a lot of it was beyond me. But why don't you tell us about this paper?
This is an incredible paper by basically business school professors as opposed to medical school professors. But it's called Brain Activity of Professional Investors, Signals, Future Stock Performance. So what they did is they took a bunch of Dutch professional investors, like people who work at mutual funds, and they popped them in an MRI machine. And they showed them slides of investment presentations about 45 stocks. And they're all historical.
So they would show these sort of masked investment cases for a bunch of stocks at different times over the past 10 years. And they were like, what do you think? Would you buy this stock? Right? Do you think this stock will outperform its sector?
The investors in the MRI machine either said yes or no. And they also ran the MRI while they were doing this. And it turns out that the investors' answers were worthless. Like, they did not accurately predict, no better than chance ability to predict whether the stocks would go up or down. But their brains, their brains, did accurately predict whether the stocks would go up or down.
Which is to say that if you looked at, like, a region of their brain called the nucleus accumbens, which is like sort of the thing that anticipates rewards. It lit up when they saw presentations about stocks that were going to go up. So subconsciously, they knew which stocks would go up, even though consciously they did not know which stocks would go up.
I do love that.
It's amazing.
But the, how do you apply it? How do you possibly?
You put your portfolio manager in an MRI all day.
That's it?
Yes.
I mean, I think that that would be a terrible, a terrible existence.
But like, if you made a lot of money.
Yeah, true. I mean.
If this really worked. By the way, I'm not, you know, I'm not so sure how well this really works, but it worked in some experimental design. But it's fascinating too, because, like, how could this work, right? Like, how could it be that you can subconsciously know which stocks would go up?
You just like instinctively know, but you can't translate that into an actionable decision.
Yeah. But so here's what I think the explanation is. to the extent this is real. In the introduction to the paper, they're like, there are other experiments like this. And one is like a sort of famous.
one is like, you play songs to people in an MRI and the songs that light up their brains in certain ways go on to become hit songs. And so it's like people's brains instinctively know it's going to be a hit song. Well, that makes a lot of sense, right? Right. Like something about that song instinctively like, makes everyone like it, right?
Like it lights up a section of your brain. Like, of course that's going to go on to be a hit, right? Maybe it's the same with stocks, right? It's like a meme stock phenomenon where, like something about a stock makes these investors like it, that's going to make other investors like it. And so the stock will go up.
Right? So that's how it works. It has nothing to do with fundamental financial analysis. It just has to do with something in the shape of the stock makes people like it. And stocks that people like go up because they buy them, right?
Yeah.
And if you look at the paper, like the way they present these investment cases to, like the portfolio managers in the MRI, is like they show them a company description and they show them a price chart and they show them like a fundamentals page. that's like a bunch of like ratios and like earnings information. And they show them news. They show them like summaries of like some news items about the stocks. What actually lights up their brains is just the description and the price chart.
Yeah. So like the fundamental page, worthless for the price chart. They see the price chart and their brain lights up like that's a good sign, right?
People like lines. Yeah.
But only some lines, right? Right. The lines that make their brains light up, are the lines that will go up in the future, right? Like the good looking lines. Yeah.
Are the good stocks to buy. It's like technical analysis. If you look at a chart and the chart makes you happy, then it'll probably make other people happy. And so you should buy that stock.
That is the best reason why technical analysis might be real that I've heard.
It's the only reason.
It's just good lines.
Technical analysis is like organized mass psychology, right? It's like, oh, this line shows that people like the stock, right? It's not that weird to think that you could grasp that at a pre-conscious level, right? Where you'd see the lines and you don't know what the lines mean, but like somewhere deep in your animal brain, you're like, oh, that's a good stock.
Your, your lizard brain activates, and that's basically the foundation of technical analysis. I mean, again, who knows if any of this is actually real? I feel like the only way to really find out is if this was applied at scale, and we gave them. Yeah, yeah.
All, you know, academic finance papers, it's like, okay, sure, that's an interesting result, but like what hedge funds are implementing it, right? Yeah. And like, I don't know. Like you could see Steve Coe being like, hmm, right? Like that's like a thing that someone's going to try.
Someone should send him this paper.
It's in Money Stuff.
Well, I hope he read it.
I mean, you probably have to pay a premium, but like there's some marginal investor who, like, can't quite get a job as a portfolio manager at a top multi-strategy fund. But if you were in an MRI machine, he could.
Oh yeah. Yeah. I mean, it's all in there. It's all in there. In his brain.
Exactly.
He, just, he can't translate it. I will say it's been a while since I read a paper like this and I always love methodology, and there were a few charming details in here about the actual participants. Like you said, they're from leading Dutch investment companies, 34 participants, only one was a woman.
I did not expect that.
I noticed that immediately. The mean age was 47..
You'd want to do that experiment better, right? But like I would be interested in doing this experiment because these are all like Dutch professional money managers. Yeah. I'd be interested in doing it on day traders, right?
Oh yeah.
Because the thing that is happening here is not like deep, fundamental analysis, right? Yeah. The thing that's happening here is like, oh, that line looks good. Maybe, like a random amateur, would be just as good.
Yeah, that's true. We should try it on all different members of the population. I also thought this was cute. So participants received no compensation, but whoever was the most accurate in predicting stock outcomes would be awarded a prize of 500 euros. There were two winners so that they had to split the prize.
They each got 250 euros for all told this lasted 85 minutes. So that's a pretty good return on your time.
I mean, I don't know.
I mean, probably.
Like a one in like 30 chance of 250 euros for an hour and a half at an MRI. Like, I don't know.
I would do it.
By the way, these are professional money managers. Like their day job is picking stocks that'll go up and they get paid more than that for it.
Yeah. But it sounds like they're not too good at that.
And that was the Money Stuff Podcast. I'm Matt Levine.
And I'm Katie Greifeld.
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