Originally posted on Quartz:
The French like to invest their savings in life insurance, and Max-Hervé George’s father probably thought he was being wise by buying his son a policy, worth 50,000 francs (now roughly €8,000), when he was seven years old. Little did he realize just how wise that decision was.
George’s policy, a Fixed Price Arbitrage Life Insurance Contract with the insurer L’Abeille Vie, allowed him to re-allocate his investments into different funds every Friday (link in French). He was able to switch funds before the next week’s prices were published, regardless of the fact that the market had moved in the interim.
Essentially, George could invest at last week’s prices knowing what was going to happen in the future. Between 1997 and 2007, his family earned annual returns of 68.8% on the contract. They should have at least €100 million ($112 million) by now.
The blogger Jason Kottke compared the contract to Grays Sports Almanac…
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