Superstitions make for less-than-super stockmarket returns

MODERN stockmarkets, with their lightning trades and endless reams of data, sometimes seem to be run by automatons, not people. But lift the curtain and the wizards pushing the buttons turn out to be as susceptible to fear and irrationality as any of their abacus-wielding ancestors. That, at least, is the conclusion of Gabriele Lepori of the Copenhagen Business School, whose work on solar and lunar eclipses suggests that modern-day man, even of the steely-eyed, stockbroking variety, is still prey to ancient superstition.

By choosing to study eclipses, Mr Lepori has neatly avoided the two largest obstacles to proving the effects of superstitious behaviour on stockmarkets. The first is that one culture’s lucky sign is often another’s omen of disaster. The second is that not everyone may experience an “unlucky” event at once. Eclipses, however, have been feared all over the world for millennia. Even better, they are widely publicised and highly visible, and happen to the entire planet over a short period. That means that their effects on stock trading—if there are any—should be seen easily. …