When I come across a study that says investing based on the moon’s cycle or your personal horoscope works, I immediately know it’s a study I can use in my Friday posts about the ridiculous and weird side of finance.
But while almost no one in the West would invest their money based on their horoscope or superstitions about numbers, this is something that happens so often in China that it can influence the markets (see here or here).
To test how big this effect is, a team of researchers asked 84 Chinese venture capital investors and 280 Chinese individual investors to participate in a laboratory experiment. In this experiment they divided the participants into two groups. One group received information about a stock and asked if they wanted to invest in that stock. The other group received additional information in the form of a Chinese or Western fortune-telling report that predicted that the decisions the investor made would turn out positive or negative.
Here’s how willingness to invest changed depending on the presence of a positive or negative fortune telling report.
Influence of fortune telling reports on willingness to invest
Source: Xu et al. (2025)
When it comes to fortune telling reports, Chinese horoscopes clearly have more influence on Chinese investors than Western horoscopes. And the effects are great. A positive Chinese horoscope increases the willingness to invest by more than 20 percentage points.
And what’s even more worrying is that venture capital fund managers are even more guided by horoscopes than the average Chinese individual investor. Shouldn’t these guys be more advanced?
And since next week is Chinese New Year:
#Fortune #tellers