The Hathaway Effect: Is Anne Good for Berkshire?
By SARAH STODOLA,
Posted: March 23, 2011
Anne Hathaway can carry the box office, but can she also carry a stock? It would seem so: Every time the Oscar-nominated actress has a big news day, Berkshire Hathaway’s stock gets a bump.
The correlation between the two Hathaways was first noticed by the Huffington Post’s Dan Mirvish, who tracked a number of key dates in Ann’s career over the past couple of years, and found that without fail (in his somewhat limited sample), human Hathaway props up company Hathaway. To wit: When Bride Wars opened in January 2009, BRK.A went up 2.61 percent. When Love and Other Drugs premiered last November, the stock rose 1.62 percent (clearly, critical reception is not a factor). And The Research Puzzle blog points out that in fact Berkshire’s high over the past two-and-a-half years was reached on … the day after the Oscars, which Ann co-hosted.
The link can very likely be attributed to today’s automated computer algorithms, which are now responsible for at least half of all trades on Wall Street, and apparently can’t distinguish between a beautiful movie star and the most humble of investment firms.
Experts acknowledge that this particular cause and effect is indeed possible.
Say an automated computer monitoring news feeds finds an unusual number of Hathaway mentions, which kicks it into trading action. That explains an increase in trading volume, but why does the Berkshire stock trend up? “Since these stories were probably generally positive, they'd be looking to buy,” says Scott Patterson, author of The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It. “If Anne Hathaway were arrested for drunk driving, maybe that would have a negative effect on the stock.”
Lucky for Warren Buffett, Berkshire’s second name is Hathaway, not Lohan.