Memo #3: No, your Birkin isn't from China

And some other things

Does the death of Popes affect the stock market?

Academics often have a lot of time on their hands and so they do a lot of weird studies. While I couldn’t find one referencing the death of Popes, I did find a study looking at the impact of Queen Elizabeth II’s death¹.

This paper examined the impact of the passing away of Queen Elizabeth II on the UK markets by using a sample of 20 top-revenued companies in 2022 from 11 different categories and found that this event generated heterogeneous effects among different firms. This research has identified that the departure of Queen Elizabeth II had a small impact on the UK companies in the Biotech, Oil & Gas, Mining, and Tobacco industries, which had few or no significant abnormal returns in the days following the event. In terms of cumulative impact, companies in the Retail, Telecommunications, Banks, and Defense Contractors sectors show significant negative CARs for at least eight days after the event. However, companies in the Oil & Gas, Mining, and Consumer Goods industries show significant positive CARs after the event.

So, I mean — it’s a fairly useless study, because the sample size is so low. But it’s fun! If you’d been an analyst at some big brain fund and said OK, we’ve put this into the machine, and let’s buy Oil, Mining and Consumer Goods, and sell Banks and Retail — then you would’ve made some money!

What that means for the Pope dying, then, I don’t know. But here’s what happened after QEII’s death: a little of this, a little of that, but not a whole lot in the long run (or even the short run).

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The hemline index

One thing about fashion is that hemlines are often precursors to a recession or bull market. Long hemlines = recession. Short hemlines = bull market. See the chart below from “databutmakeitfashion”: