Ranking Social Mood

The quantifying social mood is the next step after behavioral finance and Socionomic theory.
The last time we made a case in favor of football compared to baseball under the backdrop of Socionomics, the study of human social behavior. Immediately after the post I was corrected by experts from Socionomics explaining why football was also a bullish sport like baseball.
These were their observations, “Mukul, we’re going to tentatively label Soccer, or Football, a bull market sport unless evidence shows otherwise. We first toyed with the idea that attendance figures of the World Cup might give us a clue as to determine if Soccer is a bull or bear market sport. The only correlation we found is that attendance size is relative to the host country. For example, attendance in England (1966) is much higher than Chile (1962). Next, we followed the history of soccer, from its primitive conception to the present and found that the game was allowed by authorities and official rules were adopted during bull markets. On the flip-side, England banned the sport during the bear market of 1314. But to make things more confusing, Queen Elizabeth I banned the sport in 1517, but it was not rigorously enforced. Soccer Stars: Pele is heralded as the best soccer player on the planet and his career was during the bull market from 1957-1971. There is physical contact in soccer but not to the same degree as compared to American football, Hockey or Rugby.”
Classifying social mood and labeling it with wave counts is still an expertise, especially if you are new to Elliott Waves. Though Socionomics experts defined and developed an essential treatise on social behavior, quantification of Socionomics like behavioral finance isn’t easy. My questions about Socionomic theory are basic. How do you quantify contact in a sport? What is more bullish, baseball or football? What is the least bullish sport? How can one historically quantify the changing degree of bullishness or bearishness in a sport? Can we rank social mood? How can we do it? Is ranking of social mood indicators like consumer sentiment index, brands index, Demographic indices, movie and entertainment indices, real estate activity, Olympic participation, bankruptcy, investor sentiment, market breadth indices different with different time? Or is social mood like behavioralists say only about long-term reversals? Or can social mood Indices be understood and used for investment decisions on the shorter multi-week, multi-month time frame?
If relative performance is about quantification, why can’t Socionomics quantify outperformance and underperformance in different sports (long football – short baseball/ short Nike – long FCTL) and different social mood indices, pin-pointing time of performance and underperformance? Like it’s time for movies and entertainment sector to outperform apparel accessories and luxury sector or sugar the indicator of mood should now start outperforming gold the crisis commodity. These questions of pin-pointing performance respective to a time frame, monthly, yearly, multiyear trends are not only tough for the socioeconomic theory to answer, but also for behavioralists, fundamentalists, and economists.
Sam Stovall’s sector rotation, a great idea suggesting performance cyclicality in industry-wide sectors (utilities, energy, staples, capital goods, materials, financials, technology etc.) fails when it comes to illustrating shorter time frame performance cyclicality (between sectors) for few months, weeks or days. Robert Shiller’s performance divergence between fundamental data and traded data suffers from similar gaps. Shiller highlighted performance divergence between fundamental and traded data but did not talk about cyclicality of divergence
These are still the experts we are speaking about. There are fund managers who talk about Africa as the final destination for investment, without really understanding performance cyclicality. How is African investment landscape ranked in the MENA region for a yearlong investment and how does the ranking (relative value) change if we look at the next few years. Very few investment experts can answer this question. Dynamic relative performance connected with holding period offering relative rankings, can’t be so simple.
We have illustrated performance cycles on global assets for multiple time frames. Today we extend it to social mood indices. We took the following indices and time series viz. Consumer Sentiment Index (University of Michigan), Consumer Sentiment Index (Melbourne), Consumer Sentiment Index (Ireland), S&P600 Movies& Entertainment, Real Estate, VIX (Volatility Index), S&P Advertising and Marketing index, Apple (Gadgets), Sugar, sporting goods-hobby-book-music stores, S&P Apparel. Accessories & Luxury Goods indexed and benchmarked them against gold prices. Sugar and Vix were at the bottom of an average 3.3-year economic cycle, while real estate, movies, and Apple were at the top of the rankings. Performance cycles illustrate the value in the worst and risk in the best. While it is tough to bet against France and bet in favor of South Africa at the start of the world cup, but top performers as a rule underperform. Sugar and Volatility should outperform Apple and S&P Real Estate should underperform. Is ranking social mood so simple? Yes.