Stock Markets and Length of Skirt. April 6, 2007Posted by nsworld in Business and Economy.
Isn`t it funny? What the length of a skirt has got to do with , the movement of a stock market index? Yes there is a correlation , says Ralph Rotnem, a Harvard graduate and the propounder of Hemline theory/indicator.
Hemline theory is a sort of study of social mood and behaviour and an effort to link that to stock market movement. According to Ralph, when people become affluent and mood is upbeat in the society length of skirt decreases, this he connects with stock market performance and has found that even stock markets perform well at that time. He links both of these to Liquidity phenomenon.
Seems to be an interesting theory and observation. Just like stock/index, skirt length also has a support and Ressistance level and reaching of upper or lower limit implies concurrance of an extreme positive or negative mood.
But can we use it in India where we don`t have an uniformity in dressing across our vast geography?
Heel length Indicator:Suppose if i want to create another indicator called Heel length Indicator and test whether there is any correlation between this and stock market returns, then what i will do? Simple i will collect the numbers of the average length of heels of foot-wears sold by top Foot wear companies and quantity in different quarters and juxtapose it with stock market returns of respective quarters. Then i will find the correlation i.e, Beta and write my observations, that’s it.
Believe me, am not a Harvard Graduate!!!!