On May 6, 2010, at exactly 2:45 p.m., the Dow Jones Industrial Average dropped almost 1,000 points in a matter of seconds. Panic ensued, but within three minutes, the Dow had recovered its losses. Even today, no one really knows what caused the “flash crash,” except that it was related to algorithmic trading--or, trading controlled by a complex computer program. Many of us were surprised to learn that even financial analysts couldn’t explain their own programs.
Interaction designer Shing Tat Chung set out to examine our complicated relationship with finance last year. “Everyone has their own perception of the markets, yet most people still don’t fully understand how it works,” explains the Royal Academy of Art student. He developed A Superstitious Fund, an algorithm controlled by common human superstitions, to teach people the basics.
“We have to realise that actually when a lot of money is involved, we become a whole lot more irrational and superstitious,” Chung tells Co.Design. “We tend to resort to finding ridiculous patterns, creating conspiracy theories, and rituals.” He points to an example in England, where homes at addresses involving the number 13 are automatically devalued by a few thousand pounds.
A Superstitious Fund foregrounds how irrational humans--and their machines--can be. Chung calls the fund a “superstitious automated robot," programmed with human traits--like a belief in bad luck. The fund trades stock based on numerology, astrology, and a self-taught logic built on its successes and failures. So, it’s a non-living entity that makes random decisions just like your average irrational human would.
Chung invited people to invest a few pounds in the fund before it launched, and ended up receiving almost £5,000, which is now in play on the FTSE 100 Index. At the end of this year, the investors will receive returns based on the fund’s performance--or, you know, they won’t. He says he isn’t betting on whether his robot will ultimately put his investors in the red, but he’s already lining up investors for a second round in 2013.
As fantastical as Chung’s project seems, the designer notes that the reality is just as terrifyingly imperfect. “It wasn’t too long ago that large hedge funds and reputable investment branches were resorting to astrological readings to determine trading positions,” he says. “And I wouldn’t even be surprised if they still did.”