October 15, 2017
Do you suffer from triskaidekaphobia? That is, do you fear the number 13? If you do, you might not be conducting business today and so you may not read this article until the weekend or Monday morning.
But don’t feel bad. If you are superstitious, you are not alone.
This past August parts of North America got to witness a total solar eclipse when the Moon passed between the Sun and the Earth.
While the celestial event shouldn’t have mattered to anyone conducting business as usual that day, believe it or not it did. Stock trading both the day before and the day of the eclipse was erratic sparking those who normally buy to sell and vice versa. Why? Because stock market behavior is influenced by eclipses.
While this sounds ridiculously medieval, the astute Wall Street player might have seen it coming.
Several years ago Gabriele Lepori of the Copenhagen Business School in Denmark wrote a paper in which he examined 362 eclipses that were visible anywhere in the world between 1928 and 2008. Seen by the superstitious as bad omens, Lepori matched the eclipses against four U.S. stock indexes – the Dow Jones Industrial, the Dow Jones Composite, the New York Stock Exchange Composite and the S&P 500 – to see if the events impacted trading. They did. He found a small but constant set of effects: eclipses correlate with lower-than-average stock returns. Additionally, this outcome increases during periods of economic uncertainty, and when the eclipses are given additional attention by the press, or in our case in August, mainstream media. Slumps in returns are reversed in the days following an eclipse – as shrewd investors no doubt recognized the financial opportunity.
Given that eclipses are perfectly predictable, this trading behavior not only appears to undermine the Efficient Market Hypothesis – an investment theory that states it is impossible to “beat the market” because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information – but highlights the role of superstition in business.
As strange as it may be, examples of superstitious behavior are easy to find, even in environments that place a premium on intelligence, rationality and commercial wisdom. For example, 15% of us still regularly read horoscopes. About 80% of high-rise buildings around the world do not have a 13th floor, airports a 13th gate, nor do planes have a 13th aisle. Some of you will take your next investment cue from whether or not the New York Yankees can beat the Houston Astros in the American League playoffs and go to the World Series; provided you wear your rally caps.
People in business are no exception: The salesman who wears his lucky suit, lucky shoes, lucky tie, etc., the executive who will only sit across from someone at a business meeting instead of next to them, who will not meet someone outside of regular business hours, who will only sign an agreement with a certain brand of pen or a certain color ink (black instead of blue), etc. If nothing else, the true power that superstitions provide is a positive, reinforced confidence for those who believe in them.
There are superstitions when it comes to money like finding a face up penny and picking it up thinking it will bring you good luck all day, to making a wish when you throw a coin in a fountain, to the Chinese practice of feng shui. Did you know the southeast corner of your home is considered your “wealth area”? According to the superstition, decorating your wealth area with trinkets that symbolize money accumulation, like gold colored vases and Chinese coins, or stashing some money there, can help you maximize its impact on your financial life.
And then there are superstitions all over the world when it comes to conducting business.
In China, for example, the number four is considered extremely unlucky as the pronunciation of the word is nearly identical to that of the word for “death.” So, many Chinese businessmen avoid starting meetings during the 4 o’clock hour and instead like to start their meetings during the 8 o’clock hour as the number 8 is considered to be a very favorable number.
In Germany, a country that usually celebrates festivities with a good beer or ale – look no further than Oktoberfest for a glaring example – make a toast with a glass or stein of water won’t just make you look a little odd, but it’s believed to bring about extreme misfortune and even death.
And in Russia, shaking hands over a door threshold is said to not only bring grave misfortune to the recipient of the visitor, but it is considered an insult to those you are meeting. So, to avoid any possible negativity, when traveling in Russia for business, be sure that you are safely in an office or conference room before going in for the greeting.
Whether or not you choose to believe superstitions is up to you. Until then, don’t walk under that ladder, avoid those cracks in the sidewalk, stay clear of that black cat that might cross your path and throw salt over your shoulder, because there’s no harm in letting a little superstition impact your business. Is there?