Investing

The World's Smartest Bad Investors

Why do so many economists get killed in the markets? Here's one economist's theory.

He was good at some things.

Hulton Archive/Getty Images

In 1996, Jay Ritter, a finance professor at the University of Florida’s Warrington College of Business, published a rueful essay in the journal Financial Management, recounting a story of how he lost money in the markets. It started with a victory: Thinking he had detected a pattern in the futures market, he and some other professors bet some money on it and won. Encouraged, they doubled down, only to find that the pattern had disappeared. Eventually, Ritter learned that the legendary Fischer Black of Goldman Sachs had figured out what he and others like him were doing and had traded against him, thus taking his money.

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