Aust supermodels great for stock market

When Elle Macpherson graced the covers of Sports Illustrated the Australian stock market soared, a trend followed by other models and global markets.

Australia needs you Miranda Kerr, Elle Macpherson, Jessica Gomes and Robyn Lawley.

Actually, the Australian sharemarket needs you.

More to the point, the Australian sharemarket needs the editors at America's Sports Illustrated magazine to put an Aussie bikini babe on the cover of their annual swimsuit issue.

Why?

Eric Fry, a Wall Street hedge fund manager and founder of the Free Market Cafe website, found when a model graces the cover of Sports Illustrated a four-year bull run usually follows in her home country's stock market.

Fry first discovered the trend in 2000 and it has continued.

"I devised this indicator for its amusement value, not its investment value," Fry wrote in a recent article on his website.

"But, here's the crazy thing: This indicator has amassed a track record that is as stunning as any swimsuit cover model."

When Macpherson scored a hat-trick of covers - 1986, 1987 and 1988 - the Australian stock exchange's 50 Leaders Index rose 91 per cent the following four years, Fry found.

In 1978, Brazil's Maria Joao was on the cover and her nation's stock market soared 465 per cent four years later, and following Swedish beauty Vendela Kirsebom's 1993 cover the OMX-Stockholm index jumped 263 per cent.

Mexico's Elsa Benitez in 2001 (up 112 per cent), Argentina's Yamila Diaz-Rahi in 2002 (73 per cent) and Israel's Bar Rafaeli in 2009 (83 per cent), along with Czech trio Daniela Pestova in 2000 (86 per cent), Petra Nemcova in 2003 (406 per cent) and Veronica Varekova in 2004 (296 per cent), continued the trend according to the study.

There were a couple of blips, with Germany's Heidi Klum's 1998 cover followed by a two per cent drop and Russia's Irina Shayk's 2011 cover a 46 per cent plunge.

"Is this quirky indicator somewhat silly?" Fry asked.

"Of course it is.

"Is it entirely frivolous? Maybe not.

"The selection of a cover model reflects a subtle cultural sensibility.

"We like to be with the winning team.

"And just maybe the fashion world has an innate sense for which country will be the next winning team."


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2 min read

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Source: AAP


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