The Troubling Implications Of The Crypto-Trading Hamster
Does Mr. Goxx know something we don’t?
They say that if you put enough monkeys on typewriters, you’ll eventually get Shakespeare. But who needs high melodrama when you can build some fat stacks trading cryptocurrency instead?
Enter Mr. Goxx, a crypto-trading hamster. Yes, you read that correctly: Mr. Goxx is a hamster, and he has been trading various types of cryptocurrencies since June. What’s more, he has been highly successful at it.
This all works with a high-tech contraption hooked up to Mr. Goxx’s little hamster wheel. Like other hamsters, Mr. Goxx loves getting in some calisthenics with a quick dash round and round on his hamster wheel. Unlike other hamsters, Mr. Goxx has a wheel that selects among dozens of different cryptocurrency assets.
Then, once Mr. Goxx has selected a cryptocurrency to trade, he chooses to crawl through one of two tunnels, each with a different function. One tunnel is the “sell” tunnel, the other is the “buy” tunnel. After Mr. Goxx selects a crypto asset, and selects the appropriate tunnel for the trade, his decision is sent to a real trading platform where actual money changes hands.
As of this writing, we do not know who the human being is behind Mr. Goxx (if any; I wouldn’t necessarily be surprised to learn that hamsters overtook us evolutionarily in the last year-and-a-half). We do know, however, that Mr. Goxx is up about 20 percent since June.
As of mid-September, Mr. Goxx was outperforming the S&P 500. Also left in the dust by Mr. Goxx’s portfolio were the Nasdaq 100, Bitcoin, oh, and let’s not forget Berkshire Hathaway, which is famously managed by Warren Buffett. Ever heard of him?
Nobody really knows why this is happening, or what it all means. I can give you my best guesses, though: It is happening because it is awesome, and it means none of us know more about cryptocurrencies than a hamster.
No, this is not a scientifically controlled experiment. If you think about it more than you probably should, though, it does at least appear to have some troubling implications.
For instance, if a hamster can beat a lot of the supposedly best investors, best stock indexes, and the gold standard cryptocurrency by trading random cryptocurrencies, doesn’t that sort of scream “bubble” within the cryptocurrency marketplace?
It also makes you really wonder about whether any crypto bro should ever be allowed to comment on anything. Seems like we’d be way better off with a Mr. Goxx hot take.
It is well-known (or it should be well-known, anyhow) that most actively managed equity funds underperform the market. And when I say “most,” I really mean something closer to “almost all.”
For instance, a recent study from S&P Dow Jones Indices found that 85 percent of actively managed large-cap stock funds underperformed the S&P 500 over 10 years, and that number jumped to nearly 92 percent over 15 years.
Even portfolio managers with Ivy League degrees who are paid to spend all day trying to pick stocks that will outperform the market aren’t generally very good at it. A few do get lucky, though.
But then there’s Mr. Goxx, who I’m becoming more and more convinced knows something we don’t. He must. It’s not as if he is just spinning around pointlessly on a wheel to nowhere buying and selling imaginary electronic datapoints that do not and will not ever exist in real life. That would be ridiculous.
Anyway, kudos to whoever is keeping Mr. Goxx employed in his trading office, the Goxx Box. What a great idea.
The world of finance is in desperate need of more cute and furry pick-me-ups like this. And I’m sure absolutely no one will be troubled by the fact that a hamster is apparently having a great time being better at their jobs than them.
Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.