Friday 13th And Financial Markets

Friday, 01 May 2015
By Robert McDowall

The phobia, fear of Friday 13th is known as 'friggatriskaidekaphobia'. The word comes from 'Frigga', the name of the Norse goddess for whom Friday is named, and 'triskaidekaphobia', or fear of the number thirteen. The origins of superstition surrounding Friday the 13th is unclear. Interestingly, no written evidence exists of Friday the 13th superstition before the 19th century. However, Friday 13th did not connect with financial markets in 20th Century.

Superstitions surrounding the number 13 date back to at least 1700 BC. A longstanding myth is that that if 13 people dine together, one will die within a year. The myth derives from the Last Supper, when Jesus dined with the 12 Apostles prior to his death. There is a popular Norse myth, in which 11 close friends of the god Odin dine together only to have the 12-person party where a 13th person, Loki, the god of evil and turmoil intrudes uninvited.

An unscientific survey concludes that the number 13 has been considered cursed across the world for thousands of years. The number 12 is historically considered the number of completeness, while its older cousin, 13, has been seen as an outlier. There are 12 months of the year, 12 gods of Olympus, 12 hours of the clock, 12 tribes of Israel, 12 Apostles of Jesus, 12 Descendants of Muhammad Imams, among many incidences of the pattern historically.

How did 13th become associated with Friday? Amongst the explanations are that the Knights Templar were arrested on Friday, October 13, 1307. Others point to the last day of King Harold II’s reign on Friday, October 13, 1066. William of Normandy gave him the opportunity to relinquish his crown, which he refused. The next day William took it by force at the Battle of Hastings, causing Harold’s demise. Again, it is a modern idea that this is where the first “Friday the 13th is the ultimate unlucky day” notion came about. Friday 13th is a modern notion with no basis in any documented history, hardly surprising, since both Friday and “13” as unlucky times did not achieve popularity until the 19th century, when the two were put together as the “an unlucky day.”

One of the earliest references of this comes from a club formed by a New Yorker, Captain William Fowler. Fowler set out to prove that these sorts of superstitions are baseless. He thus formed a club known as 'The Thirteen Club' in which club members would meet in groups of 13 to dine, with their first ever get together occurring, of course, on the unluckiest day of the week- Friday the 13th in January of 1881.To joust further with fate club members walked under a ladder before sitting down to a table in room 13 of the building they were in. Moreover they ensured that plenty of spilled salt was on the table before they dined.

The notion of Friday the 13th being the unluckiest day really gathers momentum in the early 20th century. Numerous documented instances exist of people referencing it in this way; curiously including the 1907 novel by stockbroker Thomas W. Lawson called Friday the Thirteenth. This novel told of a stockbroker’s efforts to destroy the market on that ominous date.

How does the superstition of Friday 13th impact financial markets? Let’s look at some data.

In US Markets since 1950, returns on Fridays the 13th have averaged 0.88%, more than twice the 0.34% average gain of trading days in general. 'The frequency of advance' is higher on Friday the 13th than on other days. There is a greater chance that the S&P 500 will post a positive gain on Friday the 13th (56%) than other days (52%).Yet, Wall Street has embraced a fear of Friday the 13th for decades. In Oct. 13, 1989, Wall Street saw, what was at the time, the second largest drop of the Dow Jones Industrial Average in history. The day was nicknamed the Friday-the-13th mini-crash. According to CNBC, Friday the 13th is a calm day for the stock market, average gains proving to be only 0.2 percent or less. However, in three out of five of the most recent Friday the 13ths, CNBC reports that major averages ended down.

There have been some notable financial events on Friday 13th. For instance on Friday Jan. 13, 2012 Standard and Poor's downgraded the credit ratings of France, Austria, Italy, Portugal, Spain, and several other countries, as fears of a Europe-wide debt crisis rippled through financial markets. Lucky Friday the 13ths are limited to U.K. and U.S. equities. Since 1998, the main indexes in Germany, France, Spain, Italy and Switzerland have all fallen on those inauspicious days, on average. “Whether you attribute this to an Anglo-Saxon urge to cock a snook at superstition, or believe that Europeans are just unluckier than the Anglo-Saxon world is a matter of personal taste.”

The insurance industry can gain some actuarial comfort from Friday 13th. The Dutch Centre for Insurance Statistics in 2008 found that Friday the 13th is actually a slightly safer day to drive than other day. Using data from 2006-2008 in the Netherlands there were an average of 7,500 traffic accidents on days that were both Friday and the 13th of the month. On Fridays that were not the 13th, there was only an average of 7,800 accidents each day. The conclusion was that fewer people drive on Friday the 13th and, probably, people are more careful when they have to drive. They also found similar trends with reported fires and crimes, with less happening on Friday 13th. By contrast a 1993 study in the British Medical Journal, increased levels of traffic-related incidences occur on Friday the 13th as opposed to a random day, such as Friday the 6th, in the UK .Friday 13th is unlucky for some. The risk of hospital admission as a result of a transport accident may be increased by as much as 52%. Staying at home is recommended, the report concluded!

Claims to superstitions surrounding Friday the 13th are inconclusive, yet globally, people continue to demonstrate their concern by worrying about the unlucky day Friday 13th.

This article is part of Robert McDowall's series on Folklore & Finance.
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