Markets and the Moon

July 12, 2010

A new lunar cycle is upon us. So what, we hear you say? What possible bearing could the state of the moon have on the professional community, those of us who ply our trades in PR, law, marketing, accounting, not to mention the financial markets? To suggest a correlation between the moon and the markets is as sensible as postulating that the earth is not round but square.

But hold on. When no less a figure than the estimable Merryn Somerset Webb reveals the results of a study into whether there could be a correlation between the lunar cycle and stock market performance even the most cynical among us should take note. And no, not because we fear that Merryn may have lost her marbles. The FT scribe makes some provocative points, which, we confess, had hitherto eluded us:

1. Did you know that a Harvard Business Review a few years ago noted that during the seven days before a new moon and the seven days after a new moon, average stock market returns are higher than at other times? Not just in the US, but all over the world.

2. Apparently, some fund managers factor such research into their work, the suggestion being that our levels of serotonin rise and fall as the moon moves (lower when the moon is new, higher when it is full). Thus our mood – and attitude towards the market – changes as they do so.

3. Next up, some new research by the technical analysis team at RBS. It looked at the performance of six different stock market indices – the FTSE 100, the S&P 500, the Dax, the EuroStoxx 50, the Hang Seng and the CAC40 – in relation to the lunar cycle. Of their findings, Somerset Webb writes:

Take the FTSE 100. The average daily change since 1986 has been 0.5522 points or 0.02 per cent, according to RBS. On a new moon day, it has been rather higher at 5.17 points or 0.11 per cent – and, on a full moon day, it has been higher still, at 6.42 points or 0.13 per cent. So about 10 times higher than average for both.

But as she rightly says, this isn’t nearly so interesting as the RBS team’s next finding:

The RBS team then looked at what happened if you traded just twice a month, on the day of a new moon (or the next trading day if the new moon falls on a weekend) and on the day of the full moon (or next trading day). If you had started with £1,000 and bought on the new moon and sold on the full moon consistently since 1984, you’d now have £12,116 – making a nice profit of £11,116. If you’d bought on the full moon and sold on the new moon, you’d have ended up with a mere £2,036.

4. Lest lunar madness now seizes you, Somerset Webb cautions that “previous studies found that while, on average, lunar trades came good, they only did so 60 per cent of the time. ” She also adds that many studies overlook sneaky little problems like transaction fees and index fund management fees.

So, what to do? Today is the first day of trading since the new moon (which appeared on Saturday), and the full moon is a couple of weeks hence on July 26. We say: buy today, sell on July 26. But then again, our serotonin levels might not be quite in order – a problem with which good old Slim Gaillard was familiar.

 

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When a lawyer’s son is before the law

September 8, 2010

A lawyer of Swordplay’s acquaintance finds himself in a fix.

“My teenage son is to be interviewed by the local constable,” he tells us. “He is alleged to have committed an offence.”

We gasp, for such seems the appropriate response, and then ask: is it serious?

“No, it is not,” our troubled legal friend tells us. “In the great scheme of things, my son’s alleged transgression is about as de minimis as they get.”

For a split second, we wonder if said teenage son is cognisant of lawyerly terms of art such as de minimis, but rapidly conclude that the answer to this question is not a sine qua non of further discourse. And so we press on. That sounds good, we say, relatively speaking, at least.

“Yes,” says the lawyer, “but I am at a loss as to what to do with him. Do I come down hard and ground him, or do I play the liberal card, or do I find a compromise?”

That depends, we aver.

“On what?” asks our man.

On whether you would prefer to deal with your son’s alleged offence as a lawyer, or as a father, or as a father who is a lawyer, or maybe even as a lawyer who is a father.

“I see your point,” says the lawyer. And then, as if to prove that there is no cure for recidivism, he says: “The offence is, after all, de minimis.”

Without prejudice, we add.

Pictured: something out of Kafka. Now there was a man who knew about the law. And had a tough old father, too.

Max Mosley and Wayne Rooney: bedfellows?

September 6, 2010

We rarely enjoy pondering Max Mosley – the man, the sins, the legal action, what he stands for – but confess to a degree of grudging admiration for his tenacity in trying to change the law of privacy. As this story from the Independent has it, Mosley has lodged a request with the European Court of Human Rights in Strasbourg asking that, by law, journalists must inform the subject of a story of the private details they intend to print, prior to publication.

We suspect the motor racing man would never have thought it, but he would appear to have an unlikely bedfellow in a certain England footballer. Step forward, Wayne Rooney, who would presumably put his name to Mosley’s petition.

Pictured courtesy of NashvilleScene: some bedfellows are stranger than fiction.


Memo to Freelance Writers: return that editor’s call quickly

September 3, 2010

Woe betide those who freelance and fail to return a call.

We say this upon hearing of a normally prolific freelance journalist who picked up a voicemail from an editor at one of the nationals on Tuesday afternoon. Please call us, was the message, and it could mean just one thing – a commission.

Our hero’s habitual practice is to return such calls as soon as is reasonably practicable, as m’learned friends might put it. In practice, that would habitually mean within a couple of hours. Most atypically, and for reasons we have yet to fathom, our man failed to call back for a full 24 hours.

By then, said editor had looked elsewhere. One of our man’s competitors had the gig, an interesting piece about cricket and the law, one which might just be in The Times today and which, we assume, asks whether the Pakistan cricket team have been caught out (in the legal sense, you understand).

We make no judgement on the no ball scandal, save to say that it is a scandal, but in another sense the moral is clear: in the fast-paced world of modern media, he who hesitates is lost.

Pictured courtesy of PrintedClothing.com: a fast-selling shirt.