Random Musings: Hot Waitresses, Mens' Underwear and Lipstick

Since my last post just under two weeks ago, Australia has plunged into the second stage of a lock down, my work has finally handed down a work from home directive and I haven't left the house in four whole days. Whilst I have been home bound, it has given me ample opportunity to further my studies and readings on finance and the broader economy whilst this volatile situation unfolds.

One of the things that appeared as a recurring theme across books that I had read was sentiment. Essentially that it is important to have a firm understanding and ability to grasp what the market sentiment was so that we could comprehend where we currently are on the fear-greed pendulum. Among all all my technical technical readings I came across three informal measures of sentiment which I came across on Investopedia. All three are quite interesting albeit crude measures. Having taken a look back at my last several posts which have been quite sombre, I thought it would be apt to share these with you to lighten the mood a bit.

Hot Waitresses

So the idea with this measure is that next time you have a meal out, you take a look at your waitress to see if they are relatively good looking or not, because according to the index, the higher the number of good looking waitresses there are, the weaker the state of the economy. The idea behind this is that during times of plenty, attractive people will be able to find and abundance of employment in other jobs. As these jobs become less available during times of crisis, by the laws of supply and demand, they will find themselves in hospitality jobs like waitressing (or waitering).

Mens' Underwear

Prior to Alan Greenspan's research in the 1970s, mens' underewear was largely viewed as a necessity rather than a luxury, which would mean that sales would largely be static despite a change in the economic climate. However what the research in fact proved was that during times of economic decline, men tended to wear their underwear until it was threadbare rather than get new ones, an interesting contrast to womens' underwear purchase habits. Complimentary to this study, similar results were shown for things like clothing alterations and haircuts. Having said that, I am only privy to the condition of two mens' underwear, being my father and my ボーイフレンド. If you looked at their underwear as a basis to assess the economic climate we are in, you would think we are in a perpetual never ending depression, so my personal anecdotes seem to refute this research.

Lipstick

Our last informal indicator is lipstick. So rather than having an abundance of fresh crisp new underwear when the economy is booming, women tend to indulge in other luxuries such as designer handbags or outfits. The idea is that when the economy is faltering, women still want to indulge themselves and instead purchase smaller luxury goods as a sign of comfort such as lipstick, which would mean that the higher the lipstick purchases, the worse the economy. Again, if I applied this indicator to my own purchases of lipstick, you would think we never got out of the depression. Either way, it is an interesting way to consider indicators of market sentiment.

By 小福