McRib Investing

Although many people love the McRib, an even more important discovery has been made: You can make money investing in the stock market by investing in the McRib! Surely we jest, and we do. A recent article highlights the McRib effect, that is, the stock market as a whole has a higher return when the McRib is avialable. While this is a fact, as the article points out, there is an important distinction between causality and correlation. And while the McRib anomaly may tickle your ribs, it does highlight that many market analysts will tell you why the stock market rose or fell on a particular day. Most, if not all, are inferring causality when only correlation is present.