Photo: Wikimedia Commons
Friday the Thirteenth isn’t generally a day where markets sell off, as they have today.After looking at the data, Art Cashin says shares generally rally on Friday the Thirteenth, with markets up 55 to 60 per cent of the time.
But he also goes on to explain the loss of one of the New York Stock Exchange’s great traditions, Hat Day, a day when traders wore head gear to keep free of bad spirits.
From his note:
Of Friday The Thirteenth And The Last Official “Hat Day” – It’s Friday the 13th and all of the negative myths surrounding it pop up. Friday the 13th actually has a mild upward bias in stock market history. It’s up 55% to 60% of the time.
We think the negative myth may be based on a novel published back around 1910. It told of a plot by an evil stock trader (ain’t they all) to crash the market on Friday the 13th.
By a numerical oddity, the 13th of the month falls on a Friday more than any other day. In the last 400 years, we have had 688 Friday the Thirteenths.
…Prior to 1988, floor brokers used to have fun with the myth by declaring Friday the 13th “Hat Day”. Brokers would don silly and bizarre headgear, pretending to ward off the evil spirits.
The last official “Hat Day” occurred in 1987. It was on Friday, November 13th, to be exact. A few weeks earlier on Monday, October 19th, U.S. stock markets had suffered their worst selloff in history. The Dow fell 20% in one day. That would be the equivalent of a 2,500 point selloff today. The ’87 crash was far, far worse than the ’29 crash on a percentage basis. As that day wore on and prices continued to fall and fall, the floor took on a kind of surreal atmosphere, almost like a dream sequence in a movie. You bargained and fought for good prices but there was a sense that this was unreal – that this couldn’t really be happening.
After the stock crash, traders processed their losses and looked around to see who survived for another day. The subsequent Hat Day became sort-of a “Survivors Ball,” meant to celebrate the investors who had made it out of the mess.
Traders convinced the exchange to cancel any press passes and close the gallery to visitors. Over the day, the floor was mostly jovial, with traders laughing and working as they always had.
But not everyone on the floor that Hat Day was a trader. An unaffiliated reporter managed to get in for an interview and ended up staying to document the day. Months later he published a piece titled “The Fat Cats In Hats.”
That was the last Hat Day.