'Superstitious Fund' Loses Money in Month Two

July 31, 2012— -- If you invested in stocks purely based on superstitions like avoiding Friday the 13th or lucky numbers, would you end up with colossal losses or spectacular gains?

Shing Tat Chung, 25, wanted to find out. So he created the Superstitious Fund. He described it as an "unproven" one-year project that is buying and selling stocks on the U.K.'s FTSE 100 Index purely on superstitions.

Chung is a designer, artist and now fund manager in London with degrees from the Royal College of Art and Slade School of Fine Art there. He said the idea was conceived when he was researching superstitions and case studies about "how these irrationalists come to affect the world we live in."

"As a society these examples are often hidden, or we choose to ignore them because we consider ourselves as very rational and scientific beings," Chung wrote in an email to ABC News. "So there are examples out there that range from the more obvious, such as lifts avoiding suspicious numbers, to more surprising ones such as the fact that having a number 13 household automatically devalues your property by £7,511."

Chung said he created the Superstitious Fund "to poke fun at our irrationalities, but to do this in an engaging, thought-provoking way" while raising questions around algorithms, the formulae used in mathematics and computer science to solve problems.

Chung said he became interested in the role of algorithms in the "Flash Crash" of May 6, 2010, during which the Dow Jones Industrial Average dropped about 1,000 points -- and recouped most of its losses in less than 30 minutes.

"So we know this was caused by trading algorithms, but we don't know how. So we are creating these technologies, letting them loose and as a result becoming less privy to them," Chung said. "The idea of technology or algorithms operating with basic human behaviors appealed to me. So the idea was to raise questions around our irrationalities and technology though the topic of finance. We become more superstitious in times of instability, searching for patterns to give us the illusion of control. So with both economic and political instabilities, we are becoming more superstitious."

Chung approached a programmer named Jim Hunt, who works with an English trading software group called Trading Gurus.

Hunt, who describes himself as a "surrealist programmer" who experiments in art, said he was intrigued by the idea and said he would participate in the project for free if he could write the MetaTrader program as open source software. He and Chung worked together for several weeks talking about the specifications of the project, such as programming it to sell on Friday the 13th and buying on lucky days according to numerologists.

Later, according to visits with some superstitious advisers and fortune tellers, Chung decided the fund had to be launched at 4 p.m. on June 1.

Chung has 144 investors with $7,585, or £4,828.88. Chung presented the idea at his college. He got media coverage, and interested audience members started to email him, saying they wanted to participate. The minimum investment was £2, or about $3.14.

At the bottom of every page of Chung's website, he makes it very clear that investors can lose all their money. One warning reads: "This experiment is a speculative, unproven, early stage investment looking to establish a premise with the risk of total loss."

Hunt named the MetaTrader robot, as those in the forex marketing business say to describe automated trading systems, Sid, the superstitious robot.

"We also have Ray, the random robot," Hunt said. "It's just a name. Sid rolled off the tongue."

The fund has been trading for just under two months and it is down about 9.5 percent as of July 30.