AnneHathawayJan10

How’s this for a smart investment strategy? The next time a corporate behemoth like Google acquires a company like Nest for a few billion bucks, it should buy stock in any publicly traded company with a similar name or which has a similar ticker symbol.

If you had done this with NEST, the penny stock symbol that represents Nestor, Inc., a bankrupt company selling off its assets, not Nest Labs, the Internet of Things company that makes smart thermostats — you could have reaped a 1900 percentage return.

Pretty funny, right? But it’s not the first time investors have bought stock in the wrong company. In October, when Twitter released its S-1 filing, troves of investors purchased stock in Tweeter Home Entertainment, a bankrupt electronics chain, which led the Financial Industry Regulatory Authority to halt trading at 1 p.m. ET, citing an “extraordinary event” and later issuing the company a new ticker symbol to avoid future confusion.

Perhaps the weirdest linkage didn’t involve two companies. In 2011, sharp-eyed blogger Dan Mirvish noticed that every time Anne Hathaway, star of movies such as “The Devil Wears Prada,” appeared in the news, stock of Warren Buffett’s Berkshire Hathaway went up, too. For example, shares shot up 2.02 percent the night before Hathaway hosted the Oscars that year and 2.94 percent the day after.

Mirvish suggested that robotraders were scanning headlines and upon seeing “Hathaway” plastered all over the news automatically bought up a boatload of Berkshire Hathaway stock.

With algorithmic trading composing 70 percent of trading, perhaps none of this is as farfetched as you might think.

[Image Credit: Wikimedia]