Hemline theory

Definition:

A theory that stock prices move in the same direction as the hemlines of women's dresses. For example, short skirts (1920s and 1960s) are symbolic of bullish markets and long skirts (1930s and 1940s) are symbolic of bearish markets.

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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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