13 Crazy Facts About Stock Markets

Stock Markets exist since more than a century and evolved a lot since its inception. Its ever changing and getting complex day by day. Algorithms have replaced human beings to comprehend market behavior. The post is a compilation of crazy facts about Stock markets which would blow up your mind.

Bull Statue in Bombay Stock Exchange

In the Bombay Stock Exchange, there is a statue of a bull in front of the second gate of the building. People in the market have this superstition that whenever that gate is opened, the markets crash.

BSE Bull Statue

  1. The door was first opened in 1992, and the famous Harshad Mehta scam happened soon after it.
  2. In 2001, the door was opened again during US President Clinton’s visit, and there was a major crash in the stock exchange.
  3. Again, in 2008 when the gate was opened to install a new statue, the markets crashed suddenly.

This superstition has become so popular that people start selling off their positions even if there is any rumor of opening the gate.

Women can be better investors scientifically

Working Woman

The theory is actually simple and intuitive. Males are driven by testosterone. When they succeed in the stock market, the increase in testosterone levels and confidence, leads to invest even more, and more irrationally. Women appear to take the same decisions regardless of their recent successes in the stock market. The reference is a paper published this year (Bose, Subir and Ladley, Daniel and Li, Xin, The Role of Hormones in Financial Markets. SSRN, March 7, 2016) by scientists from the university of Leicester. Women do also outperform men at a professional level. According to a study from HRF, a specialist hedge fund analyst, funds ran by women had much bigger returns than those ran by men (almost 60% vs less than 40%).

Oldest Stock Exchange

Bursa Amsterodamensis

The oldest stock exchange in the world is Amsterdam Stock Exchange, which was established in 1602 by Dutch East India Company dealing with the printed stocks and bonds. It merged on 22 September 2000 with the Brussels Stock Exchange and the Paris Stock Exchange to form Euronext, and is now known as Euronext Amsterdam.

‘Bear’ and ‘Bull’

Technical vs Fundamental Analysis

The terms “Bear” and “Bull” are thought to be originated from the way of attacking by each animal, with the bull thrusting its horn up in the air, while a bear swiping downwards. Historically, the middleman used to speculate on the future price of the bearskins by selling them which they yet had to receive from the tappers, with the expectation that the price will drop. They used to call the middleman as bear jobbers and in short “bears” which is known to describe the downturn in the market. As bull was assumed to be opposite of the bear at that time so it was termed as the upward movement of the market.

Monkeys are more intelligent investors than humans

monkey

Apparently, monkeys are more intelligent investors than humans. In late 2008, Russian magazine “Finans” masterminded an experiment. They put 30 cubes with the names of companies that are traded on stock exchange before a circus monkey.

The monkey chose 8 cubes, and an investment portfolio was formed out of these shares. At year-end, this portfolio has shown higher returns than investments of 94% of Russian joint investment managers.

Sachin Tendulkar and Stock Market

What if I say Sachin Tendulkar and the Indian National Cricket Team factors the performance of Stock market in India?

Sachin

Yes, it is true as per the research worked out by two esteemed professors of Monash University, Australia few years back.

The study shows that there is sharp and significant decline in stock market prices the day after India loses a match. The fall in stock prices subsequent to loss is more than seven times the movement following a win by Indian Team.

Now, coming to Sachin Tendulkar, if he is involved in the losing match, the market goes down further (18% more compared to when he is not involved).

Another study also revealed that market performed better when Sachin scored a century.

Justification?

As we all know stock prices are ultimately governed by supply and demand of the stock. So, there tends to be some weird factors (like mood of the investors etc.) which affect their involvement in the stock market and hence the demand/supply of the stocks.

Thus, the stock market is affected by irrational/behavioral factors which has nothing to do with the actual performance of the public company.

Royal Enfield Bike or Shares?

Royal_Enfield_Bullet_Classic_500

7 years back Person A bought a Royal Enfield bike worth of 1.6lakh. He was a young passionate guy than an investor. Person B, who was a budding investor instead bought 700 (round figure) shares of Eicher Motors (holding company of Royal Enfield) worth of 240 each.

Person A with Royal Enfield has just upgraded his bike to latest Thunderbird 500cc with additional payment. That investor, well yeah, he now owns a 3bhk apartment & a mini cooper. No, he hasn’t inherited anything.

Back in 2009 share price of Eicher Motor was around 240 & currently it’s trading above 19000. That’s what a stock market is.

Most Expensive Stock in the World

The most expensive stock in world is the Warren Buffet’s Hathaway, Class A, which is priced at USD 2,13,330 per share. The reason for such a high price is that the company doesn’t splits the shares.

Cursed October

October is considered as the cursed month as the two worst stock market crashes in history occurred in this month. The first occurred in 1929 with a 25 percent declined in the share prices and the next crash occurred in 1987 October when the stock market declined by one fourth!

$224 loss due to typing mistake

Back in 2006, a broker for Mizuho Securities in Japan planned to sell off a single J-Com Co. share for 610,000 yen. Thanks to a typing mistake on his part, he ended up with 610,000 shares for 1 yen each. The error caused Mizuho’s shares to drop like a stone. This caused a loss of around $224 Million.

Walt Disney’s Housekeeper

Walt Disney gave his housekeeper Disney stocks every year for the holidays. She died a multi-millionaire.

21 Year Old Japanese Stock Trader

A 21-year-old Japanese stock day trader named Takashi Kotegawa turned $13,600 into $156 million over 8 years. He still eats cup ramen for almost all of his meals. Not only does it save time, it also prevents him from eating large meals that make him sleepy.

Pirate Stock Exchange

Crazy Facts about Stock Markets

There is a ‘pirate stock exchange’ in Somalia where locals can invest in pirate gangs planning hijacking missions.

Let us know in the comments section if you remember any more crazy facts about stock markets!

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