Stock market predictions have been tied to many things, including the length of women?s skirts. Since the market is in chaos right now, this search has become more important than ever. Stock market analysts have discovered that when TV viewers like a company’s Super Bowl commercial, the company’s stock price goes up.
A study examined over 500 commercials that aired during 17 Super Bowls from 1989-2005, and found that investors favored stocks of firms that aired likeable Super Bowl commercials. More people purchased these stocks on the days following the Super Bowl.
Firms with the least-liked commercials also experienced an increase in stock price, but not as much as firms with the most-liked commercials. Firms with commercials that drew a neutral response from viewers did not experience any significant stock price reaction.
Researcher Kenneth A. Kim says that these findings demonstrate how people often take mental shortcuts rather than go through longer analytical processing when making decisions that should be complex. In this case, people bought stock because they liked a firm’s TV commercial instead of making a decision based on a firm’s long-term value. He says, “We’re probably all guilty of this bias in our everyday lives. When shopping for a used car, we might think that a clean car is a good car. We might think a person with a nice haircut is a good person. We might think a tall person is a good basketball player.”
Art credit: freeimages.co.uk
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