Suave and sophisticated men appreciate a good suit, a smart watch, a complex glass of wine, and of course, a beautiful woman.
According to some analysts in the past, there is another reason to appreciate a beautiful woman: Her beauty is a great indication of how our economy is doing.
Here is the low down:
When An American Woman Wears A Bikini
Believe it or not, there is something called the Sports Illustrated Swimsuit Issue Indicator. According to this indicator, when an American model graces the cover, the stock market is poised for a double-digit rise. The indicator suggests that when an American model graces the cover, the S&P 500 will generate a return above its historical rate. On the other hand, when a non-American cover model appears, S&P 500 shows underperformance.
Between 1978 and 2008, the average return of the S&P 500 was 10.5%. When an American model, like Brooklyn Decker, was on the cover, the S&P 500’s average annual return was 13.9%. When the cover model was non-American, like Bar Refaeli, the average return for the S&P 500 was 7.2% only.
I personally cannot help thinking that this is fiction created by American fan boys who are a little too patriotic to their women. Beauty has no borders, and neither should stock indicators.
When Her Legs Are Revealed
While some analysts are busy taking note of which model is appearing on the swimsuit issue covers, other analysts are occupied with watching women’s legs.
This is the Skirt Length Theory. When skirts get shorter, it is time to buy. When skirts get longer, it is time to sell. Here is the “logic”: Positive markets lead to a fun nation that is more daring with fashion. A woman has more fun under a great economy, and shows more of her 43 inch legs. On the other hand, if she is adorned in Amish attire, it means fun times are over .
Perhaps when times are good, fashion tends to show more skin. Unfortunately, fashion does not change until times are good. If this indicator is true (and I only say IF), then this is a lagging indicator to begin with, which is a measurable economic factor that changes after the economy has already begun to follow a particular trend. In other words, one should buy when skirts are long, and sell during miniskirt season. Let us not forget the “buy low sell high” theory?
When Her Lips Are Glossy
To some analysts, when the economy is poor, women do not intend to give up purchasing beauty products (oh really!?). On the other hand, they indulge in less expensive luxury items. A woman may not be able to afford a Chanel handbag, but she can still own a small piece of luxury by purchasing the much more economical lipstick created by the same label.
Leonard Lauder, the chairman of Estee Lauder was the first man to come up with the term “Lipstick Indicator”. He made a consistent observation that during harsh economic times, lipstick sales tend to go up. Some analysts have made the association that in the months following September 11 terrorist attacks, lipstick sales doubled in America.
When Her Nails Are Polished
Even if it is from a well known, nail polish costs about $20 US. The Nail Polish Indicator toys with the same logic as the Lipstick Indicator.
In 2011, during the bad times in the US market, the cosmetic industry rang up $327 million in nail polish sales to the mass market. Sales since the first half of 2011 has grown 21 percent. (NDP Group market research). The industry rang up $327 million in nail polish sales to the mass market, and sales have grown 21 percent in the first half of this year, according to market researcher NPD Group.
Now that we have discussed the indicators, are you sold to the idea that a woman’s beauty can indicate how our indexes are doing? Are these theories rubbish or gold? Well, all I can say is the following:
A pretty woman beautifying herself with lip gloss and nail polish, wearing a tightly fitted mini skirt, or sporting a bikini on a sandy beach under the sun will always add great joy and pleasure to the life of any man in our global village.
And if you still ask: do any of the above attributes tell us when to buy or sell our stocks?
My friend, I really cannot care less.