3The Sun and the Moon
When we say the weather affects the economy, you figure we're talking about a drought or tsunami wiping out some nation's most valuable crop at harvest time. But it turns out that perfectly nice days can have just as big an impact on the world market.
Studies show that the stock market does better on sunny days than on cloudy days. And we're not talking about one particular month, when maybe it was just a weird coincidence -- researchers looked at data from 26 countries across 15 freaking years. And what they found was that stocks are the opposite of vampires.
It seems to be a solely psychological effect, with the sun putting the investors in a good mood, making them more likely to try new things, take more financial risks and maybe even ask out Debbie from human resources.
The sun: The tequila of Wall Street.
Well ... that sort of makes sense. Now try to figure this one out:
According to a study from the Harvard Business Review, for a period of 15 days around a new moon, stock market returns are twice as high as those during the rest of the month. So as we approach a full moon, stock prices drop. It may seem like a coincidence but, again, this is not a minor amount of data here: the researchers analyzed 30 years of market data from 25 countries, even going as far back as 100 years with U.S. stock indexes. So stocks are also the opposite of werewolves.
That, or stock brokers are all werewolves who get distracted as "the change" approaches.
Financial executives insist that observing a giant space rock is no substitute for conventional market analysis because the system is certainly more complicated and also because no one wants to believe that such a complex job could be done by a random asshole with a calendar. Still, it's refreshing to think that maybe it's not OUR fault for sinking our life savings into that Vietnamese company that makes breast implants for dogs. The moon made us do it.
Look at that flat-chested dog. How could these not take off?
2The Day of the Week
A disdain for Mondays goes beyond cubicle jobs and comic strips about a miserable cat. There is genuinely something awful about the first day of a workweek, and it takes its toll on productivity around the world. The stock market is no exception.
"Oh, sweet Garfield, only you know my pain."
Researchers from Turkey and Texas (no, we're not sure how they met) got together and studied the S&P 500 market index between 1973 and 1997 and found that days of the week can influence how much money you make trading stocks. Like we said before, Mondays are absolutely the worst. Wednesdays yield the highest returns. Fridays, on the other hand, were the drunken college girls of the group, in that they were most likely to go both ways.
And on Thursdays, Goldman Sachs gives free vodka to every broker on the floor.
Now there's a reason for the Friday phenomenon -- most economic reports are announced at the end of a workweek, so traders will have Friday to react (or overreact) to whether or not the news is good or bad.
As for Monday and Wednesday, there are a couple of explanations. Part of it is due to short sellers who freak out about their risk exposure over the weekend and close out everything they can, causing the market to drop on Monday. But the much bigger culprit is likely just simple psychology. In fact, whole heaps of studies have tried to understand the "weekend effect" on the stock market, and the majority of them contend the same thing: Investors aren't any more in the mood to do their jobs after the weekend than you are.
Just because you handle billions of dollars of other people's money doesn't mean you don't spend every weekend blackout drunk.
They are less likely to take risks, or yield nearly as much productivity, on Monday as they do later in the week. By Wednesday, however, traders settle back into their routine and are ready to trade the shit out of some textiles, or whatever people are buying these days.