There are many ways to invest in the stock market. Some prefer to buy and hold, while others trade stocks more frequently. Day traders and other stock investors have a variety of metrics to measure performance and provide insight into when and how to invest.
There are also many strange indicators and other strange hypotheses regarding stock market performance over time. I thought it would be interesting to point out a few examples that actually had considerable success (there are, of course, thousands of others that didn’t do so).
There may be subliminal destinies that dictate market performance.
1. Super Bowl Indicator
The Super Bowl metric is that if the AFC (American Football Conference) wins the Super Bowl, the next year (measured by the performance of the Dow Jones Industrial Average) will decline, and if the NFC (National Football Conference) wins the Super Bowl, , the market will rise.
This result is actually quite surprising. It’s been mostly correct since it was first introduced in 1978. As of the 2022 Super Bowl, the metric has been correct in 41 of his 55 games.
Since the Super Bowl is usually held in January or February, some believe that timing is indicative of overall market performance throughout the year.
2. Lipstick indicator
This is a bearish indicator first introduced by Leonard Lauder, chairman of cosmetics company Estée Lauder. This suggests an inverse correlation between cosmetics sales and overall economic health. It is believed that when individuals feel uneasy about the economy, they turn to inexpensive cosmetics such as lipsticks instead of expensive items such as dresses and handbags.
While not as backtested as the Super Bowl metric, the Estée Lauder Companies saw a 40% increase in sales after the September 11th attacks, with other companies reporting similar strange and uncorrelated trends. was shown.
3. Wall Street job indicators
This metric makes a lot of sense. The more glamorous jobs on Wall Street, the more likely the economy will go into a bubble. This metric is usually measured by Harvard graduates who accept jobs in investment banking, private equity, and stock trading.
This indicator suggests that investors will exit the market if more than 30% of graduates take these jobs.
The results are difficult to understand. Sell signals he gave only twice and no buy signals.
However, it issued a sell signal in 1987, followed by a market crash in the fall and another sell signal during the 2000 dot-com boom, when the market fell 9.8%.
4. Sports Illustrated Swimsuit Cover Model Indicator
As it sounds, this is an indicator based on which country the cover model in the Sports Illustrated Swimsuit Edition originated from. If the model is from the US, the S&P 500 suggests better historical returns than if the model were not. The S&P 500 will underperform.
The results hold true with a few notable exceptions.average annual return of S&P 500 was 10.7% For the last 30 years. His returns jumped to 13.9% when American models were on the cover, while non-American models returned him 7.2%.
But the worst-performing cover model was American Marisa Miller, who debuted in 2008 and fell 38.5% in the market. The Sports Illustrated Swimsuit Edition cover model indicator is getting harder to track these days. This is because SI usually has multiple swimsuit edition cover models each year.
5. Cardboard box indicator
The cardboard box indicator is based on the fact that almost everything in the world is shipped in cardboard boxes. Basically, the more demand there is for cardboard boxes, the more the factories will ship the goods, and thus the more the economy grows.
The reverse is also true. The less demand there is, the less factories need the boxes, so the economy shrinks. This bizarre stock market indicator was actually allegedly used by Federal Reserve Chairman Alan Greenspan.
Results have not been historically backtested, but at the height of the 2008 recession many corrugated box manufacturers experienced an average 50% decline in operating revenue. This could be an interesting metric to watch in the future.
6. Big Mac Index
This is an index for currency traders, essentially looking at Big Mac prices in 120 countries. I chose it because it is basically the same in every country and is sold in various places.
This is based on the idea that the same item should basically have the same price everywhere. As a result, using exchange rates to compare Big Mac prices will tell you whether the country’s currency is overvalued or undervalued at the current exchange rate. The Economist first devised his Big Mac Index in 1986 and maintains an interactive index. their website.
There are many ways to invest in the stock market and many paths to success. It’s fun to watch weird stock market indicators, but be aware that most of these “trends” are just coincidences and should not be the basis for any serious investment strategy. Never stop rooting for NFC at the Super Bowl!
What other weird or bizarre stock market indicators have you heard of? Do you use any of these?