Analyze a famous trading experiment for the brothers

Monkey Stock Selection Experiment: Controversy over the Effectiveness of Active Management

Experiment Background

In the 1990s, The Wall Street Journal initiated a 'Monkeys vs Fund Managers' stock selection competition, comparing the results of stock picks made by dart-throwing monkeys or randomly chosen selections with those of professional fund managers.

Experiment Content

Process: The experiment lasted for several years, with the stock portfolios randomly selected by monkeys often outperforming those of some professional fund managers.

Typical Case: In 1997, a chimpanzee named 'Orlando' picked stocks by throwing darts, achieving a return rate exceeding 60% compared to the fund manager for that year.

Conclusion

The experiment shows that active investment does not always outperform the market, especially in mature markets, where random selection or passive investment may offer better cost-effectiveness.