NPR’s Planet Money has what they call ‘indicators’ – small observations made by everyday people that give insight into how the economy plays out from day to day.
I think I may have found one, on the MAKE: Blog. Apparently, there is some correlation between the speed of popular music and the stability of the stock market. I think that’s what it’s saying. It’s all a bunch of math speak, which I understand only in theory (while questioning any understanding whatsoever).
But if any of our intrepid readers can make it through the 22-page PDF that is “Music and the Market: Song and Stock Volatility” by Phillip Maymin, I’m hoping one of them will explain to me what Maymin means when he says “the beat variance appears able to predict future market volatility, producing 2.5 volatility points of profit per year on average.”
2 Comments
Hi, I’m the author. I mean that, quite surprisingly, after people listen to stable music, the market tends to become turbulent, and after they listen to turbulent music, the market tends to become calm. This is counterintuitive — more intuitive would have been that turbulent markets cause people to listen to stable music — but a trading strategy seems to be profitable. I’d be happy to answer any other questions.
Best,
Phil
I must say kudos to Phil Maymin for writing a very entertaining paper. But I wonder if calling music stable vs turbulent might be a little misleading. I assume that by stable music you refer to music with low beat variance, and that by turbulent music you refer to music with high beat variance.
I noticed that stable music tends to be have a faster beat, while turbulent music tends to have a slower beat. The reason might be that it’s easier for a slow beat song to have higher beat variance than for a fast beat song to have a higher variance. For example a beat range of 10 beat per minute in a slow beat song will amount to a bigger percentage of the mean beat rate of that song.
But then again, I am not really a musician and I didn’t really listen to every single stable or turbulent song so I can’t really conclude that with conviction. But I did listen to all the songs you mentioned in your paper!
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