Investing Lessons You Can Learn From Your Cat

cat-staring-at-coins-investing-money-stock-market-getty_largeAre cats better stock pickers than humans?

In 2012, The Observer, a British newspaper, ran a contest that allowed three separate groups of participants to invest an imaginary 5,000 British pounds, which is the equivalent of about $6,080 based on today’s U.S. dollar-British pound exchange rate. The three “groups” were as follows:

  • A trio of professional money managers (Justin Urquhart Stewart of Seven Investment Management, Paul Kavanagh of Killick & Co., and Andy Brough of Schroders).
  • A group of schoolchildren between the ages of 11 and 18 at John Warner School in Hoddesdon, England.
  • A domestic house cat named Orlando.

Clearly the seasoned stock pickers who get paid a pretty penny to offer their advice to their clients should win, right? At the end of the one-year contest, the stock pickers had indeed generated a gain of 3.5% from where they’d begun. The schoolchildren didn’t fare nearly as well, with their portfolio down 3.2% from the beginning. However, Orlando, who chose his stocks by throwing his favorite toy mouse on a number grid that was associated with popular companies, left everyone in the dust with a year-end gain of 10.8%.

Allow that to sink in for a moment: a cat beat three professional stock pickers.

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