Canadian business professor Richard Hudson, PhD, reveals the bizarre reasons why it is impossible for time travelers to go into the past and make millions picking stocks:
Since H.G. Wells (1895/1991), the advantages of time travel for investors have been clear. This paper presents a solution to the problem of bilking behaviour of time travellers.
For a time traveller, all investments are risk-free since she will have perfect knowledge of prices throughout time. Reinganum (1986) claims time travellers will run around time, buying “underpriced” securities and selling (or shorting) “overpriced.” Because of the strange temporal nature of time travel, the adjustment in prices due to the trading activity of time travellers would be instantaneous, as seen by the time-bound. Time travellers from all time would be present en masse attempting to realize their arbitrage profits: the very first time traveller would meet multitudes from her future (and even multiple copies of herself) trying to engage in the same transactions she is trying to complete.
Financial markets in a time travel world would look far different from what we see. We don’t see zero rates of return, zero inflation, and unchanging security prices. Instead we see lots of volatility in financial markets. Reinganum (1986) concludes that this means that time travel must be impossible.
The actions of the time traveller, in acting like the time bound (i.e., in wealth maximizing), are in themselves self-defeating. The time traveller, in looking at the past, sees changing prices and picks the best moment to buy. But all time travellers from all time are looking at the same data and are making the same decisions. Because the last trade registered (by the time-bound) is at an advantageous price for the time traveller, when she attempts to trade, she finds herself beside a multitude of time travellers, also trying to trade. Rational time travellers, who are even more homogeneous than ordinary investors, will anticipate the actions of other time travellers, and will realize there is no point in attempting to use time travel to invest.
Time travellers coming from societies far different from our own may not even be able to understand what financial markets are or how they work. Most of our fellow citizens have no understanding of markets, so how would someone from a culture of the distant future? And even if time travellers were to come to understand what a financial security was, they may have no interest in money: they may not value what we value. Their society may be too rich to worry about some dollars from the past, or they might be more interested in love or in truth and beauty, or they might be concerned with saving their eternal souls and feel that wealth would get in the way. They may be fundamentally different from us in motivation: i.e., they may not be wealth maximizers or they may have a different view of what constitutes wealth.
Time travellers may have difficulty trading in our time due to our laws. While we don’t specifically forbid investment by time travellers, unless time travel is invented in the next few years, any time traveller we encounter would be an illegal alien, or an underage minor, not authorized to sign contracts. If, say, time travel is invented in 2020 by someone born in 1990, that person would be eight years old today (in 1998) according to his birth certificate, regardless of his apparent physical age.