OPINION: The Italian stock market rose while the U.K. stock market fell after Italy beat England in the Euros. That shows us sports make us irrational investors, Mark Hulbert writes.
The Italian stock market rose on Monday while the U.K. stock market fell. Italy’s FTSE MIB index I945, -0.50% rose 0.92% on the day, while the FTSE U.K. All-Share Index ASX, +0.02% was flat.
Perhaps the best known study on this topic appeared in the August 2007 issue of the Journal of Finance. The study, “Sports Sentiment and Stock Returns,” was conducted by finance professors Alex Edmans of the London Business School; Diego Garcia of the University of Colorado Boulder, and Oyvind Norli of the Norwegian School of Management.
One implication of this asymmetry is that the world equity market will have below-average returns during global sports competitions — during times in which some countries will be eliminated, in other words. Supporting evidence is found in another study, “Exploitable Predictable Irrationality: The FIFA World Cup Effect on the U.S. Stock Market,” by Guy Kaplanski of Bar-Ilan University and Haim Levy of the Hebrew University of Jerusalem.
The investment implication I draw from this body of research: Don’t look for the global stock market to perform better or worse than normal during the upcoming Olympics. That doesn’t mean the market won’t. It just means that if it does, you shouldn’t attribute this result to the Olympics. In other words, listening to upbeat songs can help boost stocks while sadder songs bring the market down.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Italy crowned European champions after shootout win over EnglandItaly claimed the European Championship for the first time since 1968 as penalties came back to haunt England at Wembley on Sunday, Gianluigi Donnarumma saving twice as the Azzurri won a shootout 3-2 after the game finished 1-1 following extra time.
Read more »
England-Italy Euro 2020 Final Draws Biggest U.K. TV Audience Since Princess Diana’s Funeral – Global BulletinRATINGS Sunday night’s Euro 2020 final, in which Italy beat England on penalties, was the U.K.’s most-watched TV event in over 20 years with a peak viewing audience of 30.95 million viewers and an …
Read more »
Were the Love Island cast allowed to watch Euros England vs Italy final?Love Island contestants were allowed a one-off treat for the first time in the show’s history
Read more »
Italy crowned European champions after shootout win over England | Pictures | ReutersFrom reuterspictures: Italy beat England 3-2 on penalties to secure their second European Championship title. Here are some highlights of the match and fans Euro2020
Read more »
Italy erupts as Europe's soccer champions come home to RomeFans jammed Rome's streets to cheer Europe's soccer champions on a victory tour of the city in an opened-topped bus
Read more »