The Hathaway Effect: Mythbusters
“…one thing appears to be certain: When Anne Hathaway makes headlines, the stock for Warren Buffett’s Berkshire-Hathaway goes up.”
Amongst the myriad of data points and stories which chance across our desks every day, some are quite beguiling if not to say positively intriguing. In this instance, we had a story The Hathaway Effect: How Anne Gives Warren Buffett A Rise which suggested a majestic interaction of AI failure and investment advice. Now let’s say we arrive at the data knife fight of big data with an occasionally jaundiced view — we often see the “artificial” element but perceiving the “intelligence” can often be tricky. Then again a lot of folks keep saying AI when they mean machine code while endeavouring to disintermediate a more classic phrase “common sense” altogether!
So, faced by the beguilingly feminine Anne Hathaway and the spectacularly shrewd Warren Buffett in the same sentence, we began a little investigation. The thesis was a simple one: When La Hathaway launched a new movie, the AI bots monitoring social media got carried away with the red carpet excitement and helped push up the value of Buffett’s company “Berkshire Hathaway.” So far so elegant and it all felt rather like the Robin Williams classic “Man of the Year” (even though the computer bug there appeared just SO simplistic it was the most dissatisfying element of the entire movie). However, I digress. So, the anti AI thesis was established and we got to doing a little bit of analysis. It certainly sounded like a great thesis — and a feasible one given the flaws in some AI bots let alone those sub investment grade machine learners who are still far from the madding AI crowd. In the end, however… Well let’s not get ahead of the narrative.
Our pointy headed maths nerds (thank you ladies) identified 28 data points where Anne Hathaway films were launched during the sample. It has to be said uniformity was tricky as some seemed to be release dates chosen by the original author where others were premieres in particular geographies etc. However, leaving that aside…even if there might have been a whiff of cherrypicking in the air… we pressed on regardless and went through the full period of the 28 releases from 2008–2022 (and stuck to just the release date data, not shuffling according to the original author’s whim). Six points of Hathaway news alone showed gains of +6.67%. Berkshire stock moves around the time of Hathaway (A) co hosting the Oscars in 2014 showed great leaps forward in the stock while the Dow was anaemic. (“On the Friday before the Oscars, Berkshire shares rose a whopping 2.02%. And on the Monday just after the Academy Awards, they rose again, this time 2.94%. “ — The Hathaway Effect: How Anne Gives Warren Buffett a Rise | HuffPost Impact).
However when we looked at the 8 movies released over the period 2008–2010, BH stock actually fell a net 3.28% on those release dates. Chastened but determined we made more research…
First up we looked at the total period of 2008–2010 which was 542 days with BRK stock down 280 days and up 262 — not hugely different to the perceived Hathaway days… So far, so, nada. Then we looked at the macro of Ann Hathaway releases and found her 28 movies delivered a better impact but it amounted to a mere +1.91% over release dates where 17 showed improvements in the stock and 11 saw the shares of Berkshire Hathaway falling.
Thus a lovely thesis about a lovely actress that made waves on social media looks to be more besmirching the reputation of AI than accurate. I suppose one might argue in the longer term the AI got tweaked and realised its mistakes but that doesn’t help the 2006–2008 thesis where we saw a fall in BH price as AH released her movies.
The Hathaway effect is a beguiling concept but there is little clear evidence either way — and after all even 28 data points amounts to nothing much in statistical terms…so maybe there is or was such an effect at one time. At least on the upside we had a chance to consider a beguiling actress for a few hours of research which amounted to a welcome diversion from our usual daily workload of leading analysis and thought around the world of exchanges in all their many forms!
In the end though we have to say it looks as if the Anne Hathaway leads Berkshire Hathaway stock price, is a busted myth with a little coincidence around the fringes which looked lovely but alas is not proven…although it would be lovely if Miss Hathaway could release say another few hundred movies to give us some more statistical significance to pore over.
Footnote: Raw data was as follows in this LINK.
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