According to the prospect theory financial investors tend to sell winners too early and ride losers too long. Hence, financial investors are changing their positions more frequently in a bull market than in a bear market. In a bear market, financial investors stick to their (loss) positions to avoid that their paper loss is realized and wait for a recovery of the market. Therefore, investors are not in need of financial advice and possess a lower demand for business magazines. Hence, demand for financial advise should be high (low) in a bull (bear) market which increases (decreases) the propensity to buy a business magazine. Regarding the emotional part of an investment the financial investor is less frequently buying a business journal in a bear market because she or he does not want to be reminded of her/his loss position by reading the ''bad news'' of the magazines. In the opposite market condition of a bull market, the financial investor buys a journal more frequently, because she or he gains pride by proving that his financial decisions turned out to be right. We test the hypothesis that the overall performance of the German stock market index (DAX) is related to the sale figures of two business magazines. The ''Boerse Online'' magazine deals mainly with stock market related topics while ''Wirtschaftswoche'' is a more general business journal. However, it is expected to carry many information about the economic environment which are regarded to be important to evaluate future stock market performance. Additionally, we use the sale figures of two large magazines called ''Der Spiegel'' and ''Focus''. Both magazines are more general magazines. Hence, these more general magazines are used as a control group to test our hypothesis. The stock market's situation should not have any impact on the sales of Spiegel and Focus. In fact it turns out that there exists a positive relationship as we hypothesized for the business but not for the more general magazines. The impact of the DAX on the sales is stronger for Boerse Online than for Wirtschaftswoche because this magazine is more closely related to the stock market. Further, the movement of the stock market does not influence the sale figures of our control group (Spiegel and Focus). This emphasizes our findings that the movement of the stock market is related to the sales figures of business magazines.


Czarnitzki, Dirk
Stadtmann, G.


Noise Trader, Stock Market, Business Magazine, Demand Estimation