Another reason why I think sports are stupid: The "losers" are so bent out of shape and depressed that it affects the stock market. I'd laugh at the extent of this idiocy, except that millions of us end up paying for this crap in the end. Your retirement fund lost value? Blame the World Cup.
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World Cup losses undermine stock markets
Jun 20 8:45 AM US/Eastern
Defeats in football World Cup games, depressing enough for teams concerned, also weigh heavily on the stock markets in their home countries, according to a study to be published later this month.
According to the study, to be carried in the Journal of Finance on June 29, a World Cup loss during a competition's group phase shaves an average 0.38 percent off a team's home stock market index.
But during the knock-out phase of tournaments, markets fall by 0.49 percent, wiping billions off the value of investors' portfolios.
"To put the results in perspective, 40 basis points (0.40 percent) of the UK market capitalization as of November 2005 is 11.5 billion dollars. This is approximately three times the total market value of all the soccer clubs belonging to the English Premier League," the authors of the study said.
It was conducted by American professors Alex Edmans of MIT and Diego Garcia of Dartmouth College, as well as Norwegian Oeyvind Norli of Oslo's business school.
They compared stock market indices of 39 footballing nations in the wake of world cup and other major international matches between January 1973 and December 2004.
"We already know that the markets' supposed rationality is in fact influenced by the feelings of individuals and we worked on the basis that the feelings which universally affect the humour of investors are related to sport, especially to football," Norli told AFP.
While losses invariably affect stock market levels, victories don't necessarily cause a bull run, the study found.
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