New moon is best time to make a killing

Since time began, there has been a sneaking suspicion that the heavenly bodies have some influence over our well-being, or even…

Since time began, there has been a sneaking suspicion that the heavenly bodies have some influence over our well-being, or even our behaviour.

Cassius in Julius Caesar, for example, admits the notion by denying it: "The fault, dear Brutus, is not in our stars, But in ourselves, that we are underlings."

Elsewhere, in the last scene of Othello, Shakespeare has the distracted Moor suggest another celestial cause for the unfolding tragedy: "It is the very error of the moon; She comes more near the earth than she was wont And makes men mad."

And of course, none of us needs Shakespeare to tell us that, other things being equal, most people feel more cheerful and optimistic on a sunny day than on a dark and dreary one. An article in last week's Economist, however, suggests that this heavenly influence may be wider than we think.

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There is, as this learned journal nicely puts it, a growing heavenly body of evidence that stock markets are influenced by both the moon and sun.

Research on the part played by the sun was led by David Hirschleifer of Ohio State University.

Share dealings in 26 countries between 1982 and 1997 were compared with meteorological records and it was discovered that, on average, days with sunny mornings experienced a higher growth in share prices than days when the mornings were overcast. Other weather factors, like rain, snow or the prevailing outside temperature, had no discernible effect.

The impact was significant. In the case of the New York Stock Exchange, for example, annualised returns on perfectly sunny days averaged nearly 25 per cent, compared with only 9 per cent on very cloudy days.

Four other researchers carried out a similar investigation into the moon's effect. Examining share data from 48 countries over several decades up to July this year, they found that on average, the daily return was more than 8 per cent higher around the new moon than it was near full moon.

In some cases, the average daily return was nearly double, with the lunar effect being strongest in countries other than America.

Pressed to explain their findings in the context of the failure of psychologists hitherto to find any convincing evidence of a connection between the phases of the moon and people's habits, the economists reckon this may be because the psychologists have concentrated too much on trying to link the full moon to extreme behavioural patterns, rather than to the day-to-day activities of humanity at large.

In other words, as Hamlet says: "There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."