Have you ever had a belief that was not founded in fact?
When I was a boy, I always found it odd that many people didn't like the number 13. I was born on a 13th. At least it was a Saturday....
Many people are afraid of black cats. We still have one.
I've been told not to walk under ladders. To me, that's less of a superstition and more common sense.
Superstitions are one way to help bring order to a world where order is often lacking. While most are harmless, a few of them can actually cost you money. This article explains how investors in Taiwan penalize themselves by insisting on investing according to a mysterious belief that there are special powers in the number 8.
In Chinese, the word for the number four sounds like the word for "death". The word for the number eight sounds like the word for "wealth". Because of this, many Chinese people studiously avoid anything to do with the number four and gravitate towards the number eight.
....cultural attitudes about certain numbers can have surprising economic consequences. In the U.S., it was once estimated that Friday the 13th accounted fornearly $1 billion of lost business. After their IPOs, Chinese firms whose new listing codes contain one or more eights are traded at a premium. Chinese people are willing to pay less than they otherwise would for apartments whose unit numbers end in four. And Taiwanese consumers were more likely to purchase a radio priced at 888 dollars than the same radio priced at 777 dollars.
Investors might fancy themselves immune to logical fallacies like these, but they can be just as superstitious as everyone else: A recent study focusing on the Taiwanese stock market revealed that individual investors are more than 50 percent more likely to order stocks in quantities ending in eight than in quantities ending in four (for example, preferring to order 1,408 shares instead of 1,404). And on top of that, according to a calculation by The Economist, the annual returns of the most superstitious traders trailed those of their coldly rational counterparts by nearly 10 percent.
Here is a link to the full article: Taiwanese Investors Favor the Number Eight—and They Pay for It - The Atlantic
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