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CHART OF THE DAY: HOW TO PROFIT FROM NOURIEL ROUBINI

14 April 2010 by Cullen Roche 4 Comments

Interesting chart here from the Ekonomi Turk showing Nouriel Roubini’s popularity (as expressed by Google Trends) versus the performance of the S&P 500.  Although Dr. Roubini is trying not to be viewed as a perma-bear it’s quite clear from the data that the general public thinks differently:

“When you look at the graph, you will notice the negative correlation especially after Summer of 2007. The graph covers Aug 2006- Apr 2010 period. The last time Roubini’s popularity increased tremendously was March 2009. Since then Roubini’s popularity has been declining and the stock market has been increasing. I also ran a regression test and found that 1 unit increase in Roubini’s popularity is associated with a 114 point decline in S&P 500 index. His popularity was 5.5 in March 2009 and it is 1 now, so this implies that S&P 500 index should increase by about 114*4.5= 513 points since March 2009. Considering that S&P 500 was around 680 when Roubini’s popularity peaked the last time, our regression tells us that S&P 500 index should be around 1200 today. “

Source: Ekonomi Turk

Cullen Roche

Cullen Roche

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Comments
  • James

    lol how did they calculate the Roubini index?

    04/14/2010 at 4:40 PM
  • matt

    Surely it is the other way round: When the market goes up people lose interest in what Roubini says.

    04/14/2010 at 6:27 PM
  • vol-trader

    checking the search trend chart on VIX shows a correlation of nearly 1 to the actual index. not sure how one can profit off this, but it is interesting nonetheless.

    04/14/2010 at 11:50 PM