🧑‍🎄 The Christmas bull market - The Hustle
The Hustle

🧑‍🎄 The Christmas bull market

Happy holidays from The Hustle. Like many of you, we may have visions of sugarplums dancing in our heads tonight, but rest assured we’ll be in your inbox every day next week to close out the year.

We also want to take a moment to congratulate Pete, Karin, Irenee, John, Mike, Felicia, Joe, Todd, and Travis on winning our tech giveaway. Keep an eye out for more giveaways in 2022 (damn, that’s weird to say).

Today’s rundown:

  • The Santa Claus Rally: Does Christmas move the market?
  • OOO, but cool: LinkedIn and Cameo are offering out-of-office Christmas carols.
  • Magic Dirt: The rise and fall of a pandemic Ponzi scheme.
  • Around the web: The history of eggnog, festive penguins, and more mind-boggling internet finds.

Let’s do it.

The big idea

Source: Getty Images

Does Xmas time help stocks? The ‘Santa Claus Rally’ anomaly says yes

Ah, Christmas Eve.

For children who celebrate, it’s a day to patiently wait for a bearded man to deliver not lumps of coal.

Another group that gets excited is investors: Since 1950, the S&P 500 has gained an average of 1.3% across the 4 trading days after Christmas and through the first 2 days of January.

Wall Street calls it the ‘Santa Claus Rally’

While there is no concrete explanation for the results, there are many theories, per Investopedia:

  • Positive mood: Investors are “happy and optimistic” during the holidays
  • Tax planning: People sort out their tax-loss harvesting strategies in early December, leaving room to splurge at the end of the month
  • Extra cash: People put their year-end bonuses into the market
  • Easier to move markets up: Institutional investors (pensions, hedge funds, endowments) are more bearish than retail participants. During the holidays, these professionals are less active and — with lower trading volumes — bullish retail investors can push markets up

Rally or not, the S&P 500 has had a strong year: up ~28% year-to-date (YTD), despite the recent wave of Omicron fears.

‘Correlation does not equal causation’

A few years back, a Harvard law student went viral with charts showing spurious correlations (e.g., margarine consumption is related to divorce rates in Maine).

The “Santa Claus Rally” could def be a random occurrence. But the anomaly does line up with another well-known stock trend: the January Effect, a seasonal tendency for stocks to rise at the start of a new year.

So, will a rally happen this year? We don’t know. But, what we do know for sure is that if Santa doesn’t hook up a Spider-Man Lego set for my kid tomorrow… there’s gonna be problems.

SNIPPETS

Jewelry drama: French luxury brand LVMH bought American jeweler Tiffany’s for $15.8B last January. WSJ explores the culture clash that’s happened since. #ecommerce-retail

Three offshore wind farms are planned for Australia, ranging from 1.3 to 1.6 GW. Currently, Australia has none. #clean-energy

Droid delivery: Delivery bots are tricky in dense urban areas, but they’re finding homes on college campuses. #emerging-tech

Crime pays?: The federal government’s “bug bounty” program will give hackers up to $5k for pointing out cyber vulnerabilities. #privacy

You can’t exactly put them under the tree, but NFTs are a hot gift item this holiday season. #fintech-crypto

Oops: Amazon temporarily banned itself from its Spanish-language Prime Video Twitch channel after a host flashed the audience. #big-tech

Ho-Ho-Ho OOO

Sure, out-of-office messages are fine. But what if they were carols?

In an effort to make holiday OOO messages more fun, LinkedIn invited its members to request custom out-of-office messages for the holidays, sung by Cameo carolers.

The short videos feature singers in matching sweaters belting out popular carols with the words altered, like:

The partnership was inspired by member surveys…

… that found some people aren’t very good at taking or announcing time off.

LinkedIn found that 34% of respondents felt anxious about turning on their OOO message. And even while OOO, only 35% were totally off, while others lurked, worked anyhow, or remained available if necessary.

Respondents also said OOO messages would be easier to deal with if they were more fun (49%), if more people used them (36%), or if someone else wrote theirs (15%).

What makes a great OOO is debatable

Alison Green of Ask a Manager called OOO messages the “wild west” because there really isn’t any general consensus on how to use them.

She also shared a collection of atypical OOO messages submitted by readers, which included oversharers, people who weren’t actually away, and a guy who left a snarky OOO after he quit.

However, if you’re stuck on yours, Green does have some tips here. Happy holidays!

Pandemic Ponzi Scheme

Black Oxygen Organics made a fortune selling magic dirt. Then it got caught

The pandemic sparked some wild business ideas (our readers launched 300+), but the craziest idea we’ve heard? That would be “magic dirt.”

Black Oxygen Organics (BOO), a multilevel marketing organization (MLM) based out of Canada, raked in millions selling bags of dirt for $110 a piece before its dirt empire came crashing down, per NBC News.

BOO’s seller network was key to its rapid growth

In classic MLM Ponzi scheme fashion, the company paid sellers based on both how much dirt they sold, and how many new sellers they brought on board.

In May, sellers started popping up all over Facebook, using private groups to attract customers and tout the product as a miracle cure for everything from cancer to COVID-19.

By September, the company had grown to:

  • 21k sellers
  • 38k customers
  • ~$4m in monthly sales

But it was all downhill from there

The Facebook groups that helped BOO grow ultimately led to its downfall. Anti-MLM activists joined BOO’s groups to get dirt on the sellers’ claims.

Making those claims public set off a series of events, including complaints from the FTC, a recall from Health Canada, and FDA seizures. The company finally shuttered after getting dropped by its shopping cart platform.

But this won’t be the last of ‘magic dirt’…

BOO founder Marc Saint-Onge has been peddling dirt since the ’90s and already has a pivot lined up.

Many members of the BOO community have migrated to a new Facebook group called “The Solution,” which reportedly offers an even purer version of magic dirt.

TRENDS

Comic books, whisky, and A/C units…

Every week, the Trends team of analysts compiles a report of niche markets crying out for solutions.

We show you where to build, what to build, and even walk you through how to build it.

When you read through our most recent Flares report, you’ll learn:

  • Why folks selling sheaths for A/C units are bringing in $410k/month in Amazon sales
  • How apps that help users invest in collectibles like whisky and comic books might be the next Robinhood
  • Ways big brands like Gucci are better representing neurodiversity in their marketing
  • And much more.

Want access to thousands of ideas for simple, profitable businesses you can start building over the holidays?

Try one week of Trends for just $1, and see what all the hype is about.

Try Trends →
AROUND THE WEB

🎄 On this day: In 1923, President Calvin Coolidge lit the 1st national Christmas Tree at the White House. The 48-foot Vermont fir featured 2.5k electric bulbs.

👿 That’s interesting: Santa brings you presents if you’ve been good, but, according to Germanic folklore, Krampus brings nightmares worse than coal if you’ve been bad. (He also plays “Call of Duty.”)

🎥 That’s cool: The Internet Movie Poster Awards is a searchable database of movie posters dating back to 1912.

🐴 Wait, what: A century ago, people threw Christmas parties for horses. The events were meant to raise awareness of how horses were treated and give passersby a chance to appreciate them.

🥛 Huh: The history of eggnog includes nog-fueled riots, donkey-milk prison nog, and nog without the egg.

🐧 Aww: And now, festive penguins at Matsue Vogel Park in Japan.

IN CASE YOU MISSED IT

(A roundup of our best reads from the last couple weeks…)

🌺 Feature story: How the $1B poinsettia took over Christmas.

🎤 What can The Beatles teach us about management?

📊 Wild chart: What’s behind Musk’s hefty tax bill?

💸 Founder’s Wallet: How one founder spends his dollars each month.

🚨 Yikes: The metaverse already has a harassment problem.

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