The Hathaway Effect

Dan Mirvish: "When [actress] Anne Hathaway makes headlines, the stock for Warren Buffet's Berkshire-Hathaway goes up."

• [Antinous / Moderator]

  And when actor James Franco makes headlines, stock in the House of Borbón y Borbón-Dos Sicilias goes down.

• [Purplecat]

  Good story. Unfortunately, it has a very slight drawback of being completely and utterly wrong.

  Mirvish’s guess is that automated trading picks up the actress’ name and buys on good news for both. The trouble is that BRK shares are hugely expensive and thinly traded- there is simply no market to do this sort of black-box trading.

  A much more likely reason for this coincidence is that these shares are almost always going up. The business pays no dividends, keeping all its profits on the balance sheet, which causes the value of the shares to rise instead.

  Also, the Oscars coincided with Buffett’s annual letter to the shareholders.

  • [SamSam]

    A much more likely reason for this coincidence is that these shares are almost always going up.

    Yes, I noticed that in their cited evidence, there was never a single instance of BRK’s price going down…

• [irksome]

  Then being from Massachusetts, I’m glad here last name isn’t Catskills.

  Do the fortunes of Goldman-Sachs hinge on a mid-’70s Penton’s ability to avoid a false neutral?

  Can I find an even more obscure reference?

• [Anonymous]

  I just posted the same on Neatorama and had to find if Boing Boing had covered this, so I could debunk it:

  This is junk statistics if I’ve ever seen it. There may be something to the automated trading idea, but these data are proof of nothing. How about the hundreds of other times Ms. Hathaway was in the news and the stock didn’t rise so dramatically? How volatile is this stock normally? Are these percentage increases anything out of the ordinary?

  Exasperated, I decided to d a quick test. I downloaded the BRK.A data from Jan. 1, 2008 to Mar. 18, 2011 from YAHOO Finance and did a trivial analysis of it in Matlab. Just looking at the difference between open and close prices, the stock was up 0.25% or more 308 times over this period. The stock was up 2.61% or more 47 times over this period. Those two percentages are the lowest and highest in Mr. Mirvish’s “data.”

  As a scientist and math lover I’ve disappointed to see this story making the rounds with so little skepticism. It’s a statement for the level of understanding of statistics and probability by the general public.

• [planettom]

  Meanwhile, Campbell’s has discontinued Franco-American SpaghettiOs. Coincidence? I THINK NOT.

• [JoshuaZ]

  And there’s a complete lack of statistical analysis, just noting a few coincidental data points. It isn’t implausible that such an effect occurs due to subtle suggestion on investors (the automated trading hypothesis seems wrong for reasons already discussed in this thread) but the obvious way to test this would be to look for a correlation between Hathaway’s StarMeter and the stock price BH, and compare that correlation to the correlation between with a few other actors of about her fame level. If the hypothesis is correct she should have a higher correlation.

  Right now this is just anecdotal evidence.