accident, genius or just marketing?
People have used animals for predictions since ancient times. Etruscan priests guessed from the entrails about the appointment of officials and the foundation of palaces. Roman bird augurs – whether to send troops on a campaign or what powers to give to government agencies. Fish, snakes and mice predict earthquakes, and any cat owner will tell you that his pet is smarter than many people.
So, maybe animals can earn on the stock exchange on an equal basis with people? It seems that this is no more stupid than trading according to a stock market astro forecast.
Hamster Mr. Gox never in his life wondered what is more important in successful trading: professional intuition or pure chance. He did not bother with fortune-telling using “Japanese candlesticks” and did not think in terms of trends, reversal patterns, volatility and trading sessions. But even without this, during his short career, he outperformed a number of investors of Warren Buffett’s level in terms of profitability.
What did its “creators” want to say with its success – and how did they achieve it in the first place?
How to tap a hamster before it became mainstream
In 2021, two anonymous experimenters decided to make the hamster Mr. Gox a crypto investor. In his interview with the BBC They motivated their actions by the fact that young people of their generation feel economically insolvent, and therefore are forced to engage in crypto-investments with an extremely poor understanding of how this market generally works (novice investors are sometimes called “hamsters”).
Even the name of the woolly hero was telling: he was named after the Japanese company Mt Gox, through which by 2013 47% of all transactions in the Bitcoin network took place, and which went bankrupt in 2014 after a series of hacking scandals. Mr. Gox’s huge return on investment (about 20%), the technical elegance of his “trading terminal” and good timing (the COVID-19 pandemic, which reminded everyone of the chaotic nature of the world) made him not a funny and pathetic warning, but the most widely replicated and successful animal investor .
On June 12, 2021, Mr. Gox visited his “office” for the first time and began trading. The hamster's owners constructed a “working” cage and stuffed it with electronics for online trading. When Gox crossed the threshold of the office cell, the broadcast of his working day on Twitchand a post appeared on Twitter that Mr. Gox had started the trading session.
Mr. Gox climbed into the “intention wheel”, different sectors of which were marked with cryptocurrency symbols – there were 30 of them in total, for example BTC, ETH, XRP, TRX, ADA, etc. The sector in which the hamster stopped meant the choice of this currency for trading, which was recorded by an optical encoder sensor connected to the Arduino Nano hardware platform. Gox found himself in front of two identical tunnels, one of which was responsible for buying, and the second for selling. Sensors recorded Mr. Gox's choice and sent data to a computer from which the transaction was made automatically. The results of each such trading session were published on X and in a thread on Reddit.
Mr. Gox worked on a flexible schedule and decided for himself which cell he should stay in and for how long. One of the authors of Goxx Capital, a prototyping specialist, used 3D printing to equip Goxx’s cage with a functional “trading terminal” and carved out a decorative desktop with monitors from wood for the furry crypto trader.
Hero's Path
Gox's owners did not equip it with a feedback system, as it happened in 2009 in RatTraders with ratswho were trained to trade in the futures and foreign exchange markets. There, purchases and sales were coded by the color of light bulbs with levers, music tracks corresponded to certain trading charts, and depending on guessing the rise or fall of a candle, rodents were rewarded with cheese or punished with electric shocks. But it seems that this was simply not part of the goals and objectives of the creators of Goxx Capital.
The epitome of chance, Mr. Gox ended up achieving extraordinary results. The small financier's starting capital was 362 euros. The first weeks of trading on the Stellar (XLM) platform could hardly be called successful – by the end of June 2021, after 95 trades, the hamster's capital fell by 7.3%.
However, by September 27, Mr. Gox showed a return of 19.41%. This result exceeded the returns of the FTSE 100 and Dow Jones, as well as according to crypto news site Protosand a number of investing titans like Warren Buffett.
Among Gox’s largest transactions on the crypto market are the purchase of the Chiliz token (CHZ) for $23.60 and its sale for $36.44 (+54%), the purchase of the Pantos token (PAN) for $23,570 and its sale for $35.33 (+50%). ), as well as buying Dogecoin for $23.79 and selling for 34.8 (+46%).
Mr. Gox's life was colorful, but short-lived – November 22, 2021 hamster passed away. From official statement from its owners it follows that, with the exception of minor problems with kidneys and mites, which were resolved by veterinarians before the start of his financial career, he had no signs of serious illness. Mr. Gox simply stopped eating over the weekend and, having fallen asleep, never opened his eyes again.
Total profitability of Gox amounted to 30% in less than six months of work – in annual terms this is 68%. Unlike the rats from RatTraders, Mr. Gox did not leave offspring, but became a local phenomenon of trading culture.
Also some kind of traders
No, Mr. Gox was not a crypto-prophet. And his story was intended as an illustration of the fact that one should not interpret the crypto-profits of suddenly enriched investors solely as a merit of the algorithms known to them.
In 1999, Raven the chimpanzee achieved a profitability of 365.4%throwing darts at a list of 133 companies. He entered the Guinness Book of Records with returns that tens of thousands of professional investors from the United States have never dreamed of. In 2009, the Strawberry parrot took third place in terms of profitability in a stock investment competition, organized by Paxnet. And in 2012, Orlando the cat managed £5,000 better than professional financiers when choosing 5 shares from the FTSE All-Share index according to the terms of the competition published by The Observer.
Why do animals benefit from participating in such seemingly complex and intricate systems?
The importance of randomness in the stock market was postulated by Nassim Taleb, the author of the idea of “black swans” – unpredictable events that can turn markets and people’s perceptions. Taleb developed these ideas in his bookFooled by chance”, advising not to idealize forecasts and statistics.
Although many events appear predictable, they actually occurred due to random factors. Therefore, when making any investment decisions, it is important to keep in mind that the event does not have to repeat itself, even if positive reports and growth curves indicate otherwise.
In addition, a person cannot adequately factor all variables: traders who monitor hundreds of news stories every minute are more likely to become overloaded than those who “play the long game.” More proof of a simple point: a diversified portfolio wins.
One way or another, all these experiments with animals should not be taken seriously – they are usually performances designed to remind investors that not everything can be calculated thoroughly, and that the world is largely ruled by the chaos of chance. Which, however, also needs to be learned to manage.
