‘Bron, ‘Bama, and the January Effect

The NBA may as well cancel the rest of the season.  Why?  Alabama won the college football championship, of course!  This means LeBron James is sure to win a title of his own:

This reminds me of the January effect in the markets.  The thinking is that if January is positive, the year as a whole will be positive and if January is a down month, it means negative returns for the year as a whole.  That’s totally ridiculous, of course.  The January effect ‘feels’ right because most months are positive and most years are positive.  Since January is the first month of the year, humans tend to add emphasis to it whether it is deserved or not.  Similarly, Alabama has had a great football program for the last decade and LeBron has been the best player in the NBA for about the same time (don’t @ me).  It follows that their victories would overlap to some extent.  That they are so similar is coincidence, not destiny.  Barcelona has had the top goal scorer in La Liga and a German has won the Formula One championship on Pirelli tires for each of these ‘Bama championship years.  The S&P 500 was also up double-digits each of these years.

I love stuff like this, but it is also a good reminder that the human brain will sometimes try to find patterns where there aren’t any.

Photo by Keith Allison