We seem to live by acronyms and every industry has their own unique, well-known ones. While someone outside our industry would most likely not recognize what GA, EIMA or AWCI stand for, we know right away. Some acronyms may seem strange, like MUI but allow me to introduce its relevance. The MUI acronym is important to some major manufacturers, which may seem odd as the letters MUI stand for: Men’s Underwear Index. Before you give up on this article—and you won’t want to—there is a reason the MUI is considered an important indicator of the economy.
The reasoning is that men view underwear as a necessity item and not as a luxury. Even as the economy fluctuates, men’s underwear sales typically remain fairly constant, except during extreme economic downturns, when men put off buying new underwear. Conversely, when sales pick up sharply, it is an indicator that the economy is improving. If you think this is nonsense, consider that many major manufacturers use the MUI to assist them in decisions on marketing budgets. It is also rumored that Alan Greenspan would routinely monitor the MUI.
There are other indicators used to measure the economy. The Hot Waitress Index is another one. The theory is the economy can be measured by the number of attractive people working as waiters/waitresses. According to the HWI, the higher number of good looking waitresses employed, the weaker the economy. It is assumed that attractive individuals do not tend to have trouble finding high-paying jobs during good economic times. During poor economic times, these jobs will be more difficult to come by and therefore more attractive people will be forced to work in lower paying jobs, such as waiters/waitresses.
A FAVORITE INDICATOR
My favorite measuring tool for the economy may be what is known as the Sports Illustrated Swimsuit Issue Indicator (SISII). You read correctly, the cover of the swimsuit edition from Sports Illustrated is a proven important economic indicator for the United States. The SISII tends to predict the direction of the stock market, in particular the S&P 500. History has shown that when the cover of the infamous swimsuit edition is an American model, the S&P 500 will generate a return above its historical rate, and if the cover model is a non-American model, the S&P tends to underperform for the year.
The historical numbers support this rationale. Between 1978 and 2008, investment firms agree the average annual return was 10.5 percent. When the cover model for the swim suit edition was an American model, the S&P averaged an annual return of 13.9 percent and when the cover model was non-American, the average return for the year averaged 7.2 percent. The American swimsuit model Tyra Banks is often credited as the model who made the index performance reach new heights. In 1997 when Banks was the cover girl, the S&P for the year was up a staggering 34 percent. While you may laugh, the Bespoke Investment Group takes it pretty seriously and tracks the selected model every year. Of course, it could also just be an excuse to “study” this issue.
The next SI swimsuit issue is scheduled for release in February. The identity of the new cover girl model is a closely guarded secret and the last cover model was an American. Since the last cover model was an American model, the odds would seem to favor a foreign model this year.
RE-THINK THE ECONOMY
While the SISII may or may not be a real indicator of the stock market for 2013, it does give me an excuse to purchase this all important issue with a discerning eye to be thorough as I manage my financial investments wisely. My wife tends to be more than just a bit skeptical that the selection of a swimsuit model for the cover of a magazine could have any effect on the stock market. I have the additional challenge: my wife is European and when she sees me cheering for an American model to grace the cover of SI in a skimpy swim suit, she just gives me that look I know all too well. My bigger fear is that she may actually use my own logic against me and start researching men’s underwear ads to track the trend in the MUI. Maybe I should stick to watching Jim Cramer and Warren Buffet for my financial advice. W&C