Would a time machine make you a great investor?

livemint.com:

Subscribe to enjoy similar stories. It sounds like an investor’s wildest dream. A surprising experiment shows that it shouldn’t be.

Huge sums are lavished each year on Wall Street economists and strategists asked to gaze into their crystal balls ahead of market-moving economic numbers. When they mostly get it wrong and there is a surprise, the news is big enough to make front-page news in the next day’s print edition of The Wall Street Journal. But what if a trader had an actual crystal ball and could read a copy of the world’s leading business newspaper a day early? For example, the Journal’s headline on Saturday, Oct.

5, read “Hiring Blows Past Expectations." The jobs report released the previous morning for September, which showed that U.S. nonfarm payrolls grew by 254,000 compared with expectations of around 150,000 jobs added, helped send the Dow to a record high that trading session. Meanwhile, bonds lost value, with the yield on the benchmark 10-year Treasury note adding to its largest weekly rise in nearly a year.

Knowing the actual movement of markets would be a guaranteed road to riches, not unlike the fictional Biff Tannen in “Back to the Future II" becoming fabulously wealthy when his future self travels back to 1955 with a sports almanac. But what about just the Journal’s front page with a few giveaway details blacked out, such as “stocks soar?" And how about being given a huge pot of money, plus the ability to multiply your bet, to turn your glimpse at the future into a truly vast fortune? The real-world results, courtesy of a man who learned the hard way about confident predictions and borrowed money, are fascinating. Victor Haghani, a founder of doomed hedge fund Long-Term Capital Management, whose