Company News · December 4, 2009

Predicting The Stock Market With Pop Culture

By mdecesare

A recent article in USA Today posed a very interesting question: Could pop culture behavior be an indicator of what was to come in the stock market? Seems a little farfetched, but there are definitely some trends to consider when you look at the patterns for music, movies and TV preferences right before a downturn in the market.
I don’t think it would be surprising to learn that individuals go through mood swings that determine what they watch, listen to and pay for. lf the theory cited from the Socionomics Institute is correct, the population as a whole also goes through these mood swings, which then drive the Billboard charts, Nielson ratings, movie ticket sales and possibly Wall Street as well.
The article goes on to point out that in January 2000, happy pop music was ruling the airwaves with boy bands galore, pre-breakdown Britney Spears and Ricky Martin Livin’ La Vida Loca. During that time, stocks were doing well and America was enjoying a bull market. On the flip side, when the bear market reared its head, popular music saw a shift as well. Rock groups like Linkin Park saw record-high sales in 2007 when stocks were beginning to slide.
TV and movies also seem to offer up some clues too, although TV is slower to show them. Believers in this pop culture theory think the genre popularity of movies is very telling. They would argue that The Dark Knight was huge in theaters in early 2008, right before the stock market saw some of its worst days. Other horror movies that can be linked to other bear market times include the original Dracula in the 1930s, and The Exorcist in the mid seventies. Coincidence or something more? No one can know for sure but history does lend some merit to the theory.
So if you do buy into pop culture as a predictor, what will be next? Does the wild success of Twilight – New Moon mean we are in for more rocky rides on Wall Street? As an investor, I can only hope that we get more happy, uptempo Taylor Swift and less brooding Robert Pattinson in the days ahead.

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