The news from Pennsylvania on Wednesday morning was that Punxsutawney Phil saw his own shadow, meaning (according to legend of course) six more weeks of winter.
A research paper finds a correlation between the groundhog’s predictions — or, rather, the human interpretation of the groundhog’s purported looking for its shadow — and the U.S. stock market.
Between 1928 and 2021, buy-and-hold returns are 2.8% higher around early spring rather than long winter predictions, according to a study from Savva Shanev and Arina Shuraeva of the University of Northumbria and Svetlana Fedorova from the Financial Research Institute of the Russian Ministry of Finance.
The researchers, to be clear, do not find the groundhog to have stock-market savvy. “The findings imply major and persistent irrational optimism of U.S. investors revolving around Groundhog Day early spring prognostications,” they say.
The funny thing is the groundhog might be better at the stock market than in his ostensible meteorology role — research finds the weather predictions right 50% of the time.