Mark Twain effect

Last updated

In some stock markets, the October Effect also referred to as the Mark Twain effect is the phenomenon of stock returns in October being lower than in other months. [1] The reference to Mark Twain comes from a line in Mark Twain's Pudd'nhead Wilson: "October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February." [2] [3]

The quotation is a sarcastic assertion that speculation in stocks is always dangerous. Twain wrote Pudd'nhead Wilson in 1894 many years before the stock market crashes of 1929, 1987 and 2008 which roughly occurred in October.

See also

Related Research Articles

<span class="mw-page-title-main">Dot-com bubble</span> Tech stock speculative craze, c. 1997–2003

The dot-com bubble was a stock market bubble in the late 1990s. The period coincided with massive growth in Internet adoption, a proliferation of available venture capital, and the rapid growth of valuations in new dot-com startups.

<span class="mw-page-title-main">Nasdaq</span> American stock exchange

The Nasdaq Stock Market is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second on the list of stock exchanges by market capitalization of shares traded, behind the New York Stock Exchange. The exchange platform is owned by Nasdaq, Inc., which also owns the Nasdaq Nordic stock market network and several U.S.-based stock and options exchanges.

<span class="mw-page-title-main">New York Stock Exchange</span> American stock exchange

The New York Stock Exchange is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is the largest stock exchange in the world by market capitalization.

<span class="mw-page-title-main">Dow Jones Industrial Average</span> American stock market index

The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States.

<span class="mw-page-title-main">Stock market crash</span> Sudden widespread decline of stock prices

A stock market crash is a sudden dramatic decline of stock prices across a major cross-section of a stock market, resulting in a significant loss of paper wealth. Crashes are driven by panic selling and underlying economic factors. They often follow speculation and economic bubbles.

<span class="mw-page-title-main">Mark Twain</span> American author and humorist (1835–1910)

Samuel Langhorne Clemens, known by the pen name Mark Twain, was an American writer, humorist, essayist, entrepreneur, publisher, and lecturer. He was praised as the "greatest humorist the United States has produced", and William Faulkner called him "the father of American literature". His novels include The Adventures of Tom Sawyer (1876) and its sequel, Adventures of Huckleberry Finn (1884), with the latter often called the "Great American Novel". Twain also wrote A Connecticut Yankee in King Arthur's Court (1889) and Pudd'nhead Wilson (1894), and co-wrote The Gilded Age: A Tale of Today (1873) with Charles Dudley Warner.

<span class="mw-page-title-main">S&P 500</span> American stock market index

The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. As of December 31, 2021, according to surveys, more than $7.1 trillion was invested in assets tied to the performance of the index.

<span class="mw-page-title-main">Nasdaq-100</span> Stock market index

The Nasdaq-100 (^NDX) is a stock market index made up of 101 equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange. It is a modified capitalization-weighted index. The stocks' weights in the index are based on their market capitalizations, with certain rules capping the influence of the largest components. It is limited to companies from a single exchange, and it does not have any financial companies. The financial companies are in a separate index, the Nasdaq Financial-100.

<span class="mw-page-title-main">National Stock Exchange of India</span> Indian stock exchange

National Stock Exchange of India Limited is one of the leading stock exchanges in India, based in Mumbai. NSE is under the ownership of various financial institutions such as banks and insurance companies. It is the world's largest derivatives exchange by number of contracts traded and the third largest in cash equities by number of trades for the calendar year 2022. It is one of the largest stock exchanges in the world by market capitalization. NSE's flagship index, the NIFTY 50, a 50 stock index is used extensively by investors in India and around the world as a barometer of the Indian capital market. The NIFTY 50 index was launched in 1996 by NSE.

<span class="mw-page-title-main">BSE SENSEX</span> Indian stock market index

The BSE SENSEX is a free-float market-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange. The 30 constituent companies which are some of the largest and most actively traded stocks, are representative of various industrial sectors of the Indian economy. Published since 1 January 1986, the S&P BSE SENSEX is regarded as the pulse of the domestic stock markets in India. The base value of the SENSEX was taken as 100 on 1 April 1979 and its base year as 1978–79. On 25 July 2001 BSE launched DOLLEX-30, a dollar-linked version of the SENSEX.

<i>Puddnhead Wilson</i> 1894 American novel by Mark Twain

Pudd'nhead Wilson is a novel by American writer Mark Twain published in 1894. Its central intrigue revolves around two boys—one, born into slavery, with 1/32 black ancestry; the other, white, born to be the master of the house. The two boys, who look similar, are switched at infancy. Each grows into the other's social role.

Lise Hilboldt is an American actress. She had a leading role in the film Sweet Liberty (1986), co-starring with writer-director Alan Alda and Michael Caine, and she was featured in Noon Wine (1985).

<span class="mw-page-title-main">Bump stock</span> Gun stocks that can be used to assist in bump firing

Bump stocks or bump fire stocks are gun stocks that can be used to assist in bump firing. Bump firing is the act of using the recoil of a semi-automatic firearm to fire ammunition cartridges in rapid succession.

The bank stock crisis was a financial crisis that occurred in Israel in 1983, during which the stocks of the four largest banks in Israel collapsed. In previous episodes of share price weakness, the banks bought back their own stocks, creating the appearance of constant demand for the stock, and artificially supporting their values. By October 1983, the banks no longer had the capital to buy back shares and to support the prices causing share prices to collapse. The Tel Aviv Stock Exchange closed for eighteen days beginning October 6, 1983, whilst a recovery plan was implemented and the banks were nationalized.

The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange. Along with the Dow Jones Industrial Average and S&P 500, it is one of the three most-followed stock market indices in the United States. The composition of the NASDAQ Composite is heavily weighted towards companies in the information technology sector. The Nasdaq-100, which includes 100 of the largest non-financial companies in the Nasdaq Composite, accounts for over 90% of the movement of the Nasdaq Composite.

<span class="mw-page-title-main">Mark Twain bibliography</span> About the works of Mark Twain

Samuel Langhorne Clemens ,⁣ well known by his pen name Mark Twain, was an American author and humorist. Twain is noted for his novels Adventures of Huckleberry Finn (1884), which has been called the "Great American Novel," and The Adventures of Tom Sawyer (1876). He also wrote poetry, short stories, essays, and non-fiction. His big break was "The Celebrated Jumping Frog of Calaveras County" (1867).

<span class="mw-page-title-main">Pittsburgh Stock Exchange</span> Regional stock market located in Pittsburgh, Pennsylvania

The Pittsburgh Stock Exchange was a large regional stock market located in Pittsburgh, Pennsylvania from November 11, 1864 until closing on August 23, 1974. It was alternatively named the Pittsburgh Coal Exchange starting on May 27, 1870, and the Pittsburgh Oil Exchange on July 21, 1878 with 180 members. On July 25, 1896 the Exchange formally took the name Pittsburgh Stock Exchange though it had been referred to by that name since the spring of 1894. The Exchange, like many modern day exchanges, was forced to close during sharp economic crashes or crises. On December 24, 1969 The Philadelphia-Baltimore-Washington Stock Exchange bought the Pittsburgh Stock Exchange. At its height the exchange traded over 1,200 companies, but by the last trading day in 1974 only Pittsburgh Brewing Company, Williams & Company and Westinghouse remained listed.

Robinhood Markets, Inc. is an American financial services company headquartered in Menlo Park, California, that facilitates commission-free trades of stocks, exchange-traded funds and cryptocurrencies as well as individual retirement accounts via a mobile app introduced in March 2015. Robinhood is a FINRA-regulated broker-dealer, registered with the U.S. Securities and Exchange Commission, and is a member of the Securities Investor Protection Corporation. The company's revenue comes from three main sources: interest earned on customers' cash balances, selling order information to high-frequency traders and margin lending. As of March 2022, Robinhood had 22.8 million funded accounts and 15.9 million monthly active users. In April 2022, Robinhood rolled out a cryptocurrency wallet to more than 2 million users.

The 2015-2016 Chinese stock market turbulence began with the popping of the stock market bubble on 12 June 2015 and ended in early February 2016. A third of the value of A-shares on the Shanghai Stock Exchange was lost within one month of the event. Major aftershocks occurred around 27 July and 24 August's "Black Monday". By 8–9 July 2015, the Shanghai stock market had fallen 30 percent over three weeks as 1,400 companies, or more than half listed, filed for a trading halt in an attempt to prevent further losses. Values of Chinese stock markets continued to drop despite efforts by the government to reduce the fall. After three stable weeks the Shanghai index fell again on 24 August by 8.48 percent, marking the largest fall since 2007.

<span class="mw-page-title-main">Everything bubble</span> 2020–2021 correlated bubble in assets

The expression "everything bubble" refers to the correlated impact of monetary easing by the Federal Reserve on asset prices in most asset classes, namely equities, housing, bonds, many commodities, and even exotic assets such as cryptocurrencies and SPACs. The term is related to the Fed put, being the tools of direct and indirect quantitative easing that the Fed used to execute the monetary easing, and to modern monetary theory, which advocates the use of such tools, even in non-crisis periods, to create economic growth through asset price inflation. The term first came in use during the chair of Janet Yellen, but it is most associated with the subsequent chair of Jerome Powell, and the 2020–2021 period of the coronavirus pandemic.

References

  1. "How true are stock market sayings?". The Economic Times . December 21, 2015. Retrieved November 23, 2017.
  2. Twain, Mark (1894). The Tragedy of Puddn'head Wilson. Hartford, CONN: American Publishing Company.
  3. "ASU research helps debunk myth of stock market 'weekend effect'". Arizona State University . February 1, 2017. Retrieved November 23, 2017.