PLUCK & LUCK

When we recount our greatest hits from a long and colorful career, our avid audience - usually consisting, like all audiences, of sons, daughters and grandchildren -  never wants to hear about the investigative reporting, the Nazi hunting or even the long-running affair with life-sized puppets. No. They always want to hear either about Houdini, or about the stock-picking chicken.

Bird Brain, Tic-Tac-Toe Champion of Chinatown. Also an excellent stock-picker.

Even John Bogle loved the chicken. The founder of the trillion-dollar Vanguard investment group, Bogle is the creator of the index fund and inheritor of Lord Nelson's maxim, "Press on, regardless." 

John Bogle, father of the index fund.

One of the world's foremost investment gurus, Bogle was a big fan of the "Chicken Portfolio" developed during our stint as a financial journalist at CNN.

We first ran across the chicken on our prowls of Chinatown, exploring a little dogleg known as Doyers Street. Right where the street was most bent stood The Chinatown Fair.

The chicken was unbeaten at Tic-Tac-Toe, and we delighted in taking out-of-towners down to Doyers Street and teasing them in advance to prepare to be humiliated by a creature named Bird Brain. We ourselves cannot be beaten at Tic-Tac-Toe, but the best we could ever do against the chicken was to tie. Thus we never won the big bag of fortune cookies rewarded for human victory.

The Chinatown Fair has been around since World War Two, the last  hungry ghost of the old dime museums that Houdini and his pals had played in their heydays.

When we began covering Wall Street for a living we got an idea: if you can teach a chicken to play Tic-Tac-Toe, why couldn't you teach her (Bird Brain occasionally laid an egg) to pick stocks?

Bird Brain once appeared in The New Yorker.

So we set up a stock picking contest. On the human side, we had three real full-time professional stock pickers. One of them was also an astrologer, and he ran a fund that used astrology to pick winners. The other two were totally mainstream: one was the portfolio manager at a medium-sized mutual fund run by AXA Investments. The third was quite famous and ran the investment portfolio for GE Capital. At first, all were game to pit their skills against the chicken's.

Teaching Bird Brain to pick stocks posed some unusual difficulties. First we had to pay off various Chinatown warlords for permission to bring a camera into the game parlor. Then we had to carefully change the papers on the chicken booth floor, from Page Six of the New York Post to the stock pages of the Wall Street Journal. That done, we had to encourage the chicken to pick - or more accurately, to peck - stocks on the page. So the chicken's first five pecks were all stocks that began with the letter "W": Wolverine World Wide, Winnebago, Wyeth, etc.

When all contestants had made their picks, we broadcast them on CNN and revisited them three months, six months, nine months and one year from inception.

The worst performance by far came from the astrologer. His top pick, IHI, "the next Microsoft," was a total disaster.

The GE Capital guy realized he had made a huge mistake competing with a chicken and an astrologer and begged to forfeit after 90 days.

The AXA guy hung in there for the whole year, but alas - he was skunked by the chicken. Not only did the chicken's "W" portfolio gains tie the AXA picks, the chicken's choice of Wolverine World Wide (WWW) was the overall best pick!

When Bogle saw the results he sat down for an interview on the one subject nobody on Wall Street wants to discuss: the place of luck in stock-picking. If a chicken can outperform a Harvard MBA, why are we paying "financial advisors" one percent of our hard-earned assets?