When Teresa of Ávila died in 1582, she wouldn’t have known that it would be a momentous day.
If someone had foretold that it would be, many might’ve thought that it would be her death, on 4 October, that people would remember.
I wonder if she would be disappointed to find out that her final day would be best remembered for something so mundane as calendars.
For 4 October was the last ever day of the Julian calendar, before the Gregorian (which we still use to this day) was introduced.
Introduced by the eponymous Pope Gregory XIII, it solved a pretty major problem – drift.
You see, the world goes round the sun precisely once every 365.2425 days. Previously, they’d made every year 365 days long, and so the days were drifting later and later, relative to the winter and summer equinox – ie, the seasons were slowly moving in terms of when they were in the year.
The Gregorian calendar introduced leap years once every four years, excluding years which were multiples of 400 (the next will be 2400).
Drift had already pushed the equinoxes out of sync by ten days, and so Pope Gregory ordained that those days should simply be void. So the day after Thursday 4 October 1582 was in fact Friday 15 October 1582.
The answer to the question “What happened on 10 October 1582?” is therefore… nothing.
Had Teresa of Ávila died just hours later, she would have been ten full days older.
Now that’s quirky.
It reminds us that time is a human construct. We name it, we measure it, and we use it.
Sometimes though, things aren’t just changed or adapted, they are foretold.
Until the seventeenth century, for example, comets were thought of as isolated, sent as a warning or sign by the gods.
However, in 1705, Edmund Halley posited that the comets seen in 1531, 1607 and 1682 were in fact all the same one. He predicted it would return in late 1758, and true enough on Christmas night of that year, it scooted across the sky, to the delight of enlightenment thinkers and scientists everywhere. Newtonian principles of physics, gravity, and the orbiting of bodies around the sun had been proven.
Sometimes, with research and a solid understanding of the underlying principles, patterns can be found, understood and extrapolated out into the future. Halley’s Comet has graced our skies once every 76 years ever since, and there’s a similar phenomenon in investment too.
All investors are concerned with time. What’s your time horizon, when will you make profit, when did that sale go through?
You can massage any share price chart by adjusting the dates to make it show whatever you want really.
Historically, certain months have performed better than others (as you would expect in a group of 12 samples).
Seven of the 12 average a gain of over 1% with December being the highest with an average 1.6% uptick. September however, is a big outlier as it averages a decline of 0.5%.
“Sell in May and go away” is a well-known financial adage, and turns out it’s backed up by the data.
In 2018, Thursdays saw a 0.1% decline on average, while Fridays averaged a 0.14% gain.
And one government policy has even affected which days each month see higher average returns.
As Pope Gregory XIII before them, the US government in all its wisdom decided to mess with the investment calendar.
As well-meaning and thoughtful as it may have been, laws often have unintended consequences and this is no different.
With one simple regulation, it created a monthly surge in investment, which has meant that a few days each month outperform the others, when averaged out over a few years.
My colleague Eoin Treacy has discovered this little gem of an idea, a loophole if you will, and has been sharing his own specially adapted calendar with his happy readers ever since.
If you’d like to find out more about the strategy and Eoin’s remarkable calendar, then click here.
Investment Research Analyst, Southbank Investment Research