The practice is widespread in India, where specialist astrologers have seen
big boosts in business since the uncertainties of the 2008 crash. Here in
Britain, soothsayers such as Christeen
Skinner offer the same service to City traders, entrepreneurs and
private investors. According to the Financial Times, financial astrology is
“growing in popularity and complexity”. It’s mysterious that so many
individuals who you’d imagine would rely on mathematical rationality are
resorting to the stars for assistance. More mysterious still is the
apparently indisputable logic of why traders keep coming back to services
such as Crawford’s. “What they’re looking for is a record of accuracy,” he
says.
Crawford’s was the top-performing financial newsletter in 1987, 1994 and 2008.
“And I was number two in 2002 – in the whole country,” he adds. “I’ve had
bad years when I was neutral or down, but I also have a very strong history
of hitting big movements.” Indeed, Crawford claims to have foreseen all the
crashes, including the most recent, in 2008. His newsletter dated September
4 2001 even stated the position of Mars could lead to war and a dramatic
fall in stocks.
Arch Crawford says he predicted the 2008 Wall Street crash after spotting
“some pretty ugly aspects” in the stars (REX)
Could there be something in it? After all, there have been Arch
Crawfords, all over the world, for millennia. The belief that the relative
positions, or “aspects”, of astral bodies have impact on Earthly lives has
existed for thousands of years. Ancient civilisations in China, Egypt,
Babylonia, Greece and Rome all used the stars and planets for the purpose of
divination. A 2005 Gallup poll found 14 per cent of British men and 30 per
cent of women agreed that “astrology or the position of the stars and
planets can affect people’s lives”.
In the late Seventies, a psychologist named Dr
David Nias and his academic partner Prof Hans Eysenck decided to
discover the truth. Nias collected all the scientific studies he could that
found a positive result for astrology and painstakingly went through them.
“I was impressed, in particular, by the findings that said there were more
heart attacks and road accidents when there’s a lot of magnetic activity on
the sun,” he says. “That was something that almost made scientific sense,
that all these rays could affect our brain and heart. But the physicists
tell us that a bus going past down the road would have more effect on our
body than the sun.” It took Nias three years, but, for every study, he
managed to find an alternative, rational explanation for its purported
positive result. With the exception, that is, of a paper that looked at
something called the “Mars Effect”.
“Lots of great sports stars, going back 200 years, had Mars poking over the
horizon at the moment they were born,” he says. “What was important about
that study was that it was repeated around the world by six different
research groups and they all came up with the same baffling result every
time. In total, the studies included more than 1,000 people who are
recognised as world famous. The percentage of them who were born with Mars
in this position was 15 per cent over chance. Based on 1,000 people, the
odds that this occurred by coincidence becomes millions to one.” The Mars
Effect was eventually unpicked by other academics. “They realised that birth
times shown on certificates are not always accurate,” says Nias.
This unreliable source data means that the conclusions of these studies, too,
cannot be relied upon. Other academics went on to claim those working on the
original Mars Effect studies omitted athletes with inconvenient birth times.
Further studies have had similarly devastating results for the horoscope
faithful. In a 1985 paper by Prof
Shawn Carlson, 28 professional astrologers were given a set of
genuine personality descriptions and asked to match them to their
appropriate star signs. They failed to do so at a level better than chance.
“Astrology is superstition, of course,” says Nias. He says the intense
pressure of jobs such as those of the Wall Street traders makes them more
likely to hunt for patterns in the stars. “Superstitions in general increase
when people are under stress,” he says. The very complexity of the movements
in the heavens also makes it likely that patterns will be detected where
there is none. It’s no coincidence that the same can be true for those who
study stocks. “The financial markets are a parallel to astrology,” says
Nias. “They’re chaotic. There are so many variables, how do you predict
what’s going to happen tomorrow, let alone in a year’s time?”
Order from chaos: Dr David Nias’s study of astrology
It’s not only the financial masters of the universe who peer into its starry
depths for a hit of good fortune. Owners of vineyards are said to use
astrologers, and old superstitions live on in the world of property
development. Less than five per cent of apartment blocks in Manhattan and
Brooklyn have a 13th floor, according to a survey of around 1,500 buildings
by listings website CityRealty. In Britain, property website Zoopla
has claimed that a house number 13 can be expected to fetch £4,000 less than
its neighbours.
Also often used is the Eastern practice of feng shui. In 2009, the Heron
Tower, the tallest building in the City of London, had an ethically sourced
tortoise shell buried in its foundations to encourage good fortune, in
accordance with ancient Eastern principles. The Manhattan Loft Corporation
employs a feng
shui master to work on its developments. On his advice, it built a
42-storey tower beside the Olympic
Park in Stratford with gaps in the wall to aid the flow of “vital
energy”.
Why do business people, who are supposed to be calculatingly rational, succumb
to these beliefs? “Because they’re not,” says Prof Chris French of the
University of London’s Anomalistic
Psychology Research Unit.
“That’s the short answer. People look for patterns and are very good at seeing
them, even when they aren’t there. They also pick up on what seem to be
cause-and-effect relationships that aren’t really there.” Our susceptibility
to beliefs such as feng shui and astrology come down, in part, to what
psychologists call our “locus of control”.
“Some of us have an internal locus of control, which means that when stuff
happens in our lives, we feel responsible for it,” says French. “Decisions
we’ve made, actions we’ve taken, have led us to the situations we’re now in.
But there are other people who have an external locus of control. They think
stuff happens [to] them. There are forces out there operating beyond their
control. To a certain extent it’s a victim mentality, but these people also
believe that when good stuff happens, maybe it was in the stars. It’s a
spectrum we’re talking about. Most people are somewhere in the middle.”
If there are no secrets hidden in the stars, and the customers of financial
astrologers are all guilty of irrational thinking, how do we explain Arch
Crawford’s apparently impressive performance when compared with his rivals
who use traditional means of predicting the market? In this, we find an
extraordinary twist. “To be honest, using astrology is probably as good as
any other technique,” says French. “Because consulting financial experts for
advice is no better than sticking a pin in with your eyes closed. Studies
have shown this. It’s not that astrologers are going to give you any worse
advice than accredited experts. They’re giving you equally valueless
advice.”
Work by Prof Terry Odean, of the University of California, Berkeley, has
demonstrated how little skill is actually practised by financial
professionals. He studied seven years’ worth of brokerage accounts, which
constituted almost 163,000 individual trades. If the investors were
practising with any actual expertise, the stock they bought would rise in
value, whereas the stock they sold would fall. The results Odean discovered
were extraordinary. The shares they got rid of performed, to a significant
degree, better than the ones they acquired. Further work by Odean and his
team demonstrated that the more active a trader was, the worse
their results.
In his bestseller Thinking,
Fast and Slow, Prof Daniel Kahneman writes, “Many individual
investors lose consistently by trading, an achievement that a dart-throwing
chimp could not match.” Professional investors, even fund managers,
according to Kahneman, “fail a basic test of skill”. “The evidence from more
than 50 years of research is conclusive,” he adds. “For a large majority of
fund managers the selection of stocks is more like rolling dice than playing
poker.”
Despite all this, Arch Crawford is unbowed in his conviction that his method
works. But how? Take the 2008 crash. He claims to have predicted it when he
spotted “some pretty ugly aspects, squares and oppositions and 45-degree
angles”. Astral bodies arranged in squares, he says, give “energy” and that
might lead to bad events on Earth. The energy was to be at its worst on
October 10. “So I predicted that would be the worst day,” he says. “On
October 10, the Dow Jones opened down 800 points.”
But the 2008 crash was caused not by energy from outer space, but by toxic
mortgages that were sold by the banks over a number of years and then
repackaged in such a way that their toxicity was hidden from investors.
These supposedly solid loans then collapsed, en masse. Thus the crash.
So how could events that were taking place in the sky above that hellacious
autumn of 2008 be the cause of a process that actually began years earlier?
“Well astrologers are very cautious about saying something causes
something,” he says. “It’s just not known how it works.” Like a stopped
clock that tells the right time twice a day, so the stars might occasionally
give you accurate predictions. But it’s perhaps best if, just like the
citizens of Wall Street, you bet on them with someone else’s money.
CATHERINE
TENNANT’S HOROSCOPES
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