Top Ten EconTalk Podcasts of 2015

EconTalk is an excellent series of interviews hosted by Russ Roberts. Our favourite EconTalk podcasts of 2015 are listed below.

1 Podcast icon_Planet Money Campbell Harvey on Randomness, Skill, and Investment Strategies [23 Mar 15]
2 Podcast icon_Planet Money Michael Matheson Miller on Poverty, Inc [02 Nov 15]
3 Podcast icon_Planet Money Noah Smith on Whether Economics is a Science [28 Dec 15]
4 Podcast icon_Planet Money Nathaniel Popper on Bitcoin and Digital Gold [08 Jun 15]
5 Podcast icon_Planet Money Luigi Zingales on the Costs and Benefits of the Financial Sector [02 Feb 15]
6 Podcast icon_Planet Money George Selgin on Monetary Policy and the Great Recession [14 Dec 15]
7 Podcast icon_Planet Money Mike Munger on the 500th episode [24 Dec 15]
8 Podcast icon_Planet Money Matt Ridley on Climate Change [29 Jun 15]
9 Podcast icon_Planet Money Nassim Nicholas Taleb on the Precautionary Principle and Genetically Modified Organisms [19 Jan 15]
10 Podcast icon_Planet Money Vernon Smith and James Otteson on Adam Smith [06 Apr 15]


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Top Ten Planet Money Podcasts of 2015

We’re great fans of the Planet Money podcasts. In our humble opinion the following were the best episodes in 2015.

1 Podcast icon_Planet Money Episode 416: Why The Price Of Coke Didn’t Change For 70 Years
2 Podcast icon_Planet Money Episode 621: When Luddites Attack
3 Podcast icon_Planet Money Episode 608: Shorters Gonna Short
4 Podcast icon_Planet Money Episode 606: Spreadsheets!
5 Podcast icon_Planet Money Episode 502: The Afterlife Of A T-Shirt
6 Podcast icon_Planet Money Episode 671: An Insider Trader Tells All
7 Podcast icon_Planet Money Episode 657: The Tale Of The Onion King
8 Podcast icon_Planet Money Episode 632: The Chicken Tax
9 Podcast icon_Planet Money Episode 500: The Humble Innovation At The Heart Of The Global Economy
10 Podcast icon_Planet Money Episode 644: How Much Does This Cow Weigh?


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Be a John, but buy Michael

An article in yesterday’s New York Times observed that,

Among chief executives of S.&P. 1500 firms, for each woman, there are four men named John, Robert, William or James.

What is the situation like in the UK? We don’t have up to date analysis, but below we quote some analysis that appeared in the 2007 edition of the The UK Stock Market Almanac.

What are the predominant christian names of the Chairmen, CEOs, and CFOs of FTSE 100 companies?

The following table shows the frequency of first names of the three major officers in all the FTSE 100 companies.

FistName Chairman CEO CFO Total
John 17 7 6 30
David 3 3 8 14
Philip 2 5 4 11
Michael 4 4 3 11
Andrew 0 3 7 10
Paul 1 4 3 8
Richard 2 3 3 8
Robert 6 0 2 8
Richard 2 3 3 8
Peter 5 0 2 7
Martin 2 2 3 7
Mark 0 1 4 5
Simon 1 1 3 5
Stephen 0 2 3 5

The lesson seems to be: if you want to run a FTSE 100 company, be called John or think of changing your name to John. 17 Chairmen and 7 CEOs of FTSE 100 companies have the first name John. The second most popular name is David.

It’s interesting to note how first names differ between the three roles. Apart from John, Robert and Peter are popular names for Chairmen, Philip is popular with CEOs, and David and Andrew are common for Chief Financial Officers.

What does this tell us?

Probably not very much.

The charts below, however, may give some guidance for investors.

Portfolio of FTSE 100 CEOs named John


Portfolio of FTSE 100 CEOs named Philip

The first chart plots the performance of a portfolio comprised of those FTSE 100 companies whose CEO’s first name is Michael. The second chart is similar, except the CEO’s name is Philip.

The result: Michael out-performs Philip by a wide margin.

Recommendation: buy Michael, sell Philip.

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Chinese New Year – year of the goat

Today is the start of the Chinese new year.

The following chart plots the average performance of the stock market for each animal year since 1950. For example, Ox years started in 1961, 1973, 1985, 1997, 2009; and the average performance of the market in those (Chinese) years was +14.0%.

NB. The Chinese calendar is based on the lunar year cycle and so performance has been calculated for each lunar year – not the corresponding calendar year.
Chinese calendar and S&P 500 average annual returns (1950-2015)
The Chinese New Year starting this week is…the Year of the Goat – which has been the best Chinese lunar year animal for the stock market.

The Chinese calendar is therefore forecasting (if history is a guide) the market will increase 17.9% from 19 February 2015 to 7 February 2016.

Note: There is some confusion in the Chinese astrological calendar over whether this is the year of the goat, the sheep, or the ram. If it turns out that this is the year of the ram, then the above figures may not provide an accurate forecast for the market in the coming year.

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The UK Stock Market in General Election Years

In July 1945, two months after Germany surrendered, Winston Churchill was in Potsdam at the first meeting of the heads of government of the UK, US and Russia to decide Europe’s future. On the 25th of July Churchill flew back to London to await the results of the general election that had been held that month – the first election for ten years. With the war-hero Churchill at their head, the Conservatives were confident of victory, although some of the more pessimistic forecasters thought their majority might be as low as 30. The following afternoon the results started coming in and it was soon obvious that Labour had won by a landslide. The final result was a Labour majority of 146 seats – the first time Labour had won a majority. The following day the FT Industrials Index promptly fell 3 points to 115.

Over the following few days the gloom continued and the index slumped to 105.9, although gold shares and dollar securities saw buying as a hedge against the coming socialist apocalypse. The Financial Times joined in the misery with an editorial describing the election as,

the most serious reverse since the dark days of 1940.

Nationalisation was the bogey word spooking the market – the phrase “public ownership” had appeared many times in the Labour party manifesto.

However, after the shock of a socialist government had sunk in, investors quite liked the idea of receiving compensation for their investments in some really rather dull industries, and which allowed them to re-invest in some new and more dynamic ventures. The Labour party manifesto itself had signalled the new opportunities,

The genius of British scientists and technicians who have produced radio-location, jet propulsion, penicillin. and the Mulberry Harbours in wartime, must be given full rein in peacetime too.

Well, perhaps not Mulberry Harbours but, yes, the future looked bright for British industry to exploit the new advances in electronics, radio and television, textiles, chemicals, plastics and pharmaceuticals.

A few months later, by the time of Chancellor Dalton’s first budget, the FT Industrials Index had recovered nearly all the ground lost since the election. The FT described the budget as a “tonic for both industry and labour”, and when in December the government announced the nationalisation of 850 coal industry entities, the market shrugged and share prices rose.

The 1945 election obviously took place at an exceptional time, but the reaction stages of the stock market are similar to those in other general election years. An example can be seen in the following chart of the market in the year 1983: the market rose before the election, sold off on the result, but ended the year higher.

The UK Stock Market in General Election Years_1

There have been 18 elections since WWII, and the market has ended the year higher than it started for 12 of those elections. The following chart shows the annual return for the FTSE All-Share index in each election year since WWII.

The UK Stock Market in General Election Years_2

The average return in those 17 election years (in 1974 there were two elections) was 3.0%. Hence, historical precedent would suggest that the UK market will see a positive return in 2015.

Another election to consider here might be the US presidential election in 2016: the last time the US market fell in a pre-presidential election year was in 1939, and the average return in these years has been 17%. Given the strong correlation between the US and UK markets, this could be another factor suggesting a positive return for 2015.

The above chart indicates which party won the most seats in each election year: both the Conservatives (blue) and Labour (red) have won the most seats in nine general elections since 1945. But in the nine years that the Conservatives won the most seats, the market has risen eight times with an average annual return of 10.8%; while for Labour the market only rose in three years and the average annual return was -5.8%

The following chart shows the average performance of the stock market in the months around the election itself.

The UK Stock Market in General Election Years_3

On average the market has risen two months before an election, with an average return of 0.32%. But after that the returns in the following three months are all negative, with the second month after the election seeing an average return of -1.3%.

In 2015 the general election will take place on 7 May, in which case history would suggest that the following two-month period up to 7 July will see a weak market. Of course, this period will overlap with the Sell in May effect which often sees a weaker market at this time of the year anyway.

In summary, the historical precedent suggests that the market will end higher in the election year 2015 than it starts. Although such forecasts would most likely not have been supported by Winston Churchill, who said,

I always avoid prophesying beforehand, because it is much better policy to prophesy after the event has taken place.



  1. Reference source for the 1945 general election: George Blakey’s A History of the London Stock Market
  2. Article first appeared in Investment Advisor.


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The UK Almanac Calendar

The UK Almanac maintains a calendar of important market dates. The calendar can be viewed on the UK Almanac web site here, or synced with your own online calendar (see below).

Add the above calendar to your own Android, iPhone or online calendar:

html button

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Top Ten Podcasts

Apparently, podcasts are coming back into fashion. Below is a list of the UK Almanac’s ten favourite podcasts.

Podcast icon_Planet Money 1. Planet Money

The crack cocaine of podcasts – seriously addictive. Good example is their T-Shirt project where they follow the production journey of a simple T-shirt (inspird by the fantastic book The Travels of a T-Shirt in the Global Economy by Pietra Rivoli).
 Podcast icon_StartUp 2. Startup

An absorbingly fresh view on the process of starting a company (which also happens to be a podcast company – wonderful circularity!) A good example is the episode where the company founders look for a name for the new company – should be easy, no?
 Podcast icon_Freakonomics 3. Freakonomics

Spin-off from the famous book – economics for non-economists. Typical episode: How Can Tiny Norway Afford to Buy So Many Teslas?
 Podcast icon_More or Less 4. More or Less

Statistical fact-checking programme presented by the excellent Tim Harford
 Podcast icon_TED Radio Hour 5. TED Radio Hour

A clever idea to package several TEDTalks into one hour-long show focusing on one topic. Typical episode: Predicting The Future.
 Podcast icon_Peter Day's World of Business 6. Peter Day’s World of Business

Old-style reportage, but probably the best business programme on radio. Presented by Peter Day, whose decades of experience helps puts each topic in context.
 Podcast icon_EconTalk 7. EconTalk

A series of hour-long interviews with people ranging from small business owners to Nobel economics laureates. Typical episode: interview with Robert Solow on growth theory and the challenges of macroeconomics.
 Podcast icon_In Our Time 8. In Our Time

One of the most eclectic programmes on radio; recent pogrammes have discussed Nuclear Fusion,
The Haitian Revolution, and Euler’s number. Used to be a must-listen, but going off the boil a little now – the presenter Melvyn Bragg is as impressive as ever, the tenured university guests less so.
 Podcast icon_RadioLab 9. Radiolab

A radio programme of scientific and philosophical ideas. Typical episode: speed up learnng with a zap to the brain.
 Podcast icon_60-second Science 10. 60-second Science

Bite-sze science in just one-minute.





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Monthly seasonality of gold

On 17 March 1968 the system that fixed the price of gold at USD35.00 collapsed and the gold price was allowed to fluctuate. The following chart shows the dollar price of gold since that time.

Gold ($) [1968-2014]Monthly seasonality

The following chart shows the average returns by month of gold($) for the period 1968-2014.

Gold ($) month returns average [1968-2014]And the chart below has similar parameters but it shows the proportion of monthly returns that were positive for each month.

Gold ($) month returns positive [1968-2014]Observations:

  1. Gold($) has been strong in the months of February, September and November
  2. Gold($) has been weak in the months of March and October.

Since 1968 the month with the highest volatility has been January, while the lowest has been April.


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10 seasonality trends in the UK stock market

Below is a list of 10 seasonality trends that can be found in the UK stock market-

  1. Sell in May – This extraordinary effect remains as strong as ever: since 1982 the market in the winter months has out-performed the market in the summer months by an average 8.8 percentage points annually.
  2. January effect – Performance in January tends to be inversely proportional to company size (i.e. small cap companies out-perform large-caps).
  3. Construction sector – One of the most well-known seasonality trends is the out-performance of the construction sector in the first quarter of the year (in fact the sector’s strong period today is more likely to be the three-month period Dec-Feb).
  4. Month of the year – April and December are the strongest months in the year for the stock market, while May, June and September are the weakest.
  5. Day of the week  – Wednesday is the new weakest day of the week (Monday used to be), and the strongest days are now Tuesday and Thursday.
  6. Turn of the month – The market tends to be weak a few days either side of the turn of the month, but abnormally strong on the first trading of the new month (except December).
  7. Holiday effect – In recent years the market has been significantly strong on the days immediately before and after holidays and weak fours days before and three days after holidays.
  8. Quarterly sector performance – Individual sectors display different and consistent return characteristics for each quarter of the year.
  9. FTSE 100 v S&P 500 – Although since 1984 the S&P 500 has overall greatly out-performed the FTSE 100 (+1021% against +575%), there are months in the year when the FTSE 100 fairly consistently out-performs the S&P 500.
  10. Christmas and New Year – The trading days around Christmas tend to have a particular pattern of returns.

These seasonality trends, and others, are covered in the new edition of the UK Stock Market Almanac just published.

Order your copy now!


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