Article: Hit for Six: India's Stock Market Declines When Indian Cricket Team Loses One-Day Matches

Monash University issued the following news release:
With the Australian cricket team touring India, investors on India's National Stock Exchange (NSE) have good reason to feel nervous with new research showing when India's cricket team lose one-day internationals, a decline is recorded in the stock market.
Research by economists Professor Russell Smyth and Dr Vinod Mishra at Monash University suggest the performance of the Indian cricket team in one-day matches can significantly impact on the fortunes of the Indian stock market.
"While a win by the Indian cricket team has no statistically significant upward impact on stock market returns, a loss generates a …

Impact of Sachin Tendulkar's Centuries on Indian Stock Market

Sachin Tendulkar has got 94 centuries in International Cricket so far. He has certainly has had an impact on all over India, and over the other cricketing nations. We performed an analysis of the day Sachin Tendulkar hits a century, and the movement in the Stock Market (SENSEX) the very next day. Although Sachin hit his first International century in the year 1990, but India got its LPG policy in the year 1991. So, in all the 93 centuries that were hit during the Stock Market era of India, gave the following statistics:
SENSEX Rises: 55 Times
SENSEX Falls: 38 Times
SENSEX Flat: 1 Time
Sachin was at its peak during the years of 1998-1999, when he had just given up his captaincy. During these years Sachin hit 23 Centuries. Coincidentally at this time the Asian economy was under the effect of Recession due to the Asian Financial Crisis. 16 of those 23 centuries, the stock market fell (Although Sachin did try his best). Similarly, in the recent Great Recession of 2007-09, Sachin hit 8 Centuries, of which the Market fell 5 times. So, if we remove all the recessionary forces from the Sachin Tendulkar - Stock Market analysis, we would get the following:
SENSEX Rises: 44 Times
SENSEX Falls: 17 Times
SENSEX Flat: 1 Time
This gives us the following analysis:

1. When Sachin Tendulkar scores a century, it is very likely that the Stock Market will rise the next day. (Provided there isnt a recession)
2. Sachin Tendulkar is always at its best, during the times of Recession, since the time he has been at the peak of his form, it has always been recession, i.e. Asian Financial Crisis and Great Recession.
3. Even God, Sachin Tendulkar, cant help when there is a recession in the economy.

So, if you are an Investor in the markets always be on the watch out when Sachin scores his next Century.

Cricket Stock Exchange

The Cricket Stock Exchange, or CricStock, is an online trading game which works on the principles of a stock market. The website was launched ahead of 2007 ICC Cricket World Cup.
On CricStock, (virtual) shares of cricketers (called player-stocks) are listed, allowing users to trade those shares. The movement in ‘stock prices’ of cricketers is supposed to reflect their recent performance on field and how cricket fans expect their performance to be in future e.g. fall in stock price of a cricketer might indicate that the cricketer is not performing well of late, and fans don’t expect him to return to form as well in near future.
CricStock uses virtual money for all trading purpose, and there is no exchange of real money involved at any stage of the game.

[edit] Basics of the game

CricStock lists virtual shares of all international cricketers on its stock exchange. A person, after registration on the website, gets an amount of virtual money that he can use to buy shares of these cricketers.
The registered users of the websites, also called the traders, can gain (or lose) money by selling the shares of the cricketers at higher (or lower) price than purchase price of those shares.
Registered users also get dividends on the shares they hold. These dividends depend upon the actual performance of cricketers in ongoing cricket matches.

Stock-market impact of the International Cricket Council's decision to reallocate 2011 World Cup matches

This paper analyses stock-market reactions in Pakistan, India, Sri Lanka and Bangladesh after Pakistan was stripped of hosting duties for the 2011 Cricket World Cup matches. It advances the literature by providing an analysis of a unique situation where a country was stripped of the right to host matches of a major sporting event. Pakistan's matches were redistributed among fellow host countries India, Sri Lanka, and Bangladesh. Analysing both regular and abnormal returns, I find an overall positive stock-market reaction in all these countries, albeit due to different reasons. There are negative reputational effects for Pakistan and positive reputational effects for India, Sri Lanka and Bangladesh. Further, the returns are negatively correlated with the number of matches awarded. The results suggest positive reputation effects associated with hosting the 2011 Cricket World Cup matches, but a negative marginal impact of each additional match hosted.

Indian cricket team's 'poor performance affects stock market'

Pics: India win first Test against Australia

MELBOURNE: Here's yet another reason why the Indian cricket team should keep the winning streak alive, particularly when legend Sachin Tendulkar is in the playing side -- it's poor performance can affect the country's stock market, says a new study, led by an Indian-origin economist.

With the Australian cricket team touring India, Dr Vinod Mishra and his colleague Prof Russell Smyth at Monash University have found that the "poor" performance of India, in oneday matches mainly, can significantly impact on fortunes of the Indian stock market.

"While a win by the Indian cricket team has no statistically significant upward impact on stock market returns, a loss generates a significant downward movement in the stock market.

"India's main index, the CNX Nifty show that the Nifty Index was generally flat the day after a win, but the day following a loss the index dropped by an average of 0.231 per cent. The drop following a loss was more than seven times greater than the movement following a win," Prof Smyth said.

Furthermore, when Sachin Tendulker is playing in the losing side, the loss on the stock market could be 20 per cent more, say the economists.

Prof Smyth said, "In the 100 matches in which Tendulkar played and India lost, the average return the day after the match was 0.328 per cent, an 18 per cent higher drop compared to the average drop after losing a match.

"A sporting event is a non-economic phenomenon and, as such, one might expect that stock prices will not be affected. However, behavioural finance suggests large sporting events affect the sentiments of viewers cum investors resulting in upwards or downwards 'mood swings' in the market, which are reflected in stock prices."

According to the economists, the emotional areas of the brain are nearby and when the mood is low, emotions can impact normally objective decision making, despite economic decisions being made in the frontal lobe of the brain.

"A feeling of sadness might make investors withdraw from the world and the stock market, thus resulting in reduced trading for a while, whereas anger might make them behave in an impulsive manner which might involve selling of the stocks.

"When you are tuning in to follow how Australia performs against India in the one day internationals, before you write them off as meaningless matches, spare a thought for what the outcome might mean for Indian investors," Prof Smyth said.

Pics: India win first Test against Australia

Alternative Solar Energy - An Investors Guide

An increasing number of investors has alternative solar energy stocks in their portfolios. The alternative solar energy market is credited with a lot of growth potential. Especially for investors with a long-term perspective the alternative energy market offers numerous opportunities. Furthermore, every investor knows that with his or her money he or she is helping to shape a better future.
It is expected by analysts that the renewable energy business will grow into a $13 billion dollar industry by 2013. Such an incredible growth rate promises healthy returns on investments. Especially if you are able to invest in the right start-up company you might be able to experience similar growth rates to those of Microsoft a few years ago. As oil and electricity prices are climbing further more and more people become interested in alternative energy sources. While the price alone is not enough to understand and evaluate the current energy crisis it is something that everybody experiences as unpleasant in their daily lives. The more expensive oil and gas become the more attractive other forms of energy will be.
However, even in the field of alternative solar energy you also still need to apply due diligence before making any investment decision. There are promising companies out there but that certainly doesn't mean you can just purchase any stock. Furthermore, it is no just important to choose the right company, it is maybe even more important to only purchase at the right price. The biggest problem for the investor is that most companies within the green, renewable energy market are either start-ups or very young companies that do not have a reliable track record of earnings, if they have generated earnings at all. This can lead to over-evaluations and the forming of a bubble as seen in the dot.com market a few years back. Unless you are a very seasoned and experienced investor you should probably seek the advice of professional analysts and financial planners. Buying stocks in a company that has yet to generate earnings is really just a gamble based on hope. Investing in companies with a proven track record of growing earnings is probably the smarter choice.
Overall, the expectations are high and the mood is optimistic. The number of alternative energy funds is growing and so is the amount of capital invested in them. To ensure a successful development of this new sector, the continued support of investors, governments and of the course the consumer is required.

Strategy - Buy Loser Stocks

According to the analysis of DeBondt and Thaler, portfolio of the 35 biggest losers in a previous year outperformed the market by 30% after five years. It is interesting that the portfolio of the 35 biggest winners in a previous year underperformed the market by 10%. On the long run the winner portfolio will outperform the loser portfolio, but on the short run (three to five years) the loser portfolio will perform better. Therefore this strategy says: Create a loser portfolio and sell it after three to five years.
It is not entirely clear why this strategy works. Perhaps the reason is that those companies had "extremely bad luck", and that in the following years the "bad luck" will turn around. For a certain period of time the loser stocks will continue to lose, and the winner stocks will continue to win, but after that "the wheel of fortune" should turn around. Therefore, selling stocks in the first year is likely to generate a loss. If you might need that money soon, this is not a good strategy for you.
It is important to notice that the loser stocks are not losers without a reason, meaning that the loser stocks tend to have a greater risk. It is even possible that some loser stocks will cease to exist. Also they tend to have a low price, and therefore higher transaction costs, and higher transaction costs might turn this strategy unprofitable. It is important to find a balance between the risk, time available and the transaction costs.