Mark Twain effect (Ofer Abarbanel online library)

In some stock markets, the Mark Twain effect is the phenomenon of stock returns in October being lower than in other months.[1] The name 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]

The quotation is a sarcastic assertion that speculation in stocks is always dangerous. The fact that Twain specifically picks out October initially is taken as a reference to an “October effect”, as exemplified by the 1929, 1987 and 2008 stock market crashes which roughly occurred in October.

References

  1. ^“How true are stock market sayings?”. The Economic Times. December 21, 2015. Retrieved November 23, 2017.
  2. ^“ASU research helps debunk myth of stock market ‘weekend effect'”. Arizona State University. February 1, 2017. Retrieved November 23, 2017.

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Ofer Abarbanel online library

Ofer Abarbanel online library

Ofer Abarbanel online library