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Paris Hilton Outperforms, Lindsay Lohan Not So Much

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How does the market respond to Paris Hilton news? In recent weeks there has been a flood of news and blog articles about the young hotel heiress as she was sentenced, jailed, freed early due to unspecified medical issues, jailed again and then finally set free after serving out her sentence. The StockPickr staff reports that Yahoo news contains 14,886 items from the last 30 days. We know Paris moves the celebrity media but does she move the markets?
David Linton, CEO of Updata, did some technical analysis of how news about Paris effects the price of the Hilton Hotel group, the Big Picture’s Barry Ritzholz points out.
“I started out with the idea that you buy Hilton shares in the US on good news about Paris and sell on bad news, or indeed the other way round,” Linton writes. “But the results were fairly mixed and deciding what constituted good and bad was getting difficult. The Optimised Stop for Hilton is 3% with a 5 day signal delay and you should not take signals during a breach or within 23 days of the stop signal.”
But, of course, Paris is more than just a famous name. She’s a business woman and an investor. Fred Fuld, who guest-writes at and runs Stockerblog, did some analysis of various stocks associated with Paris Hilton. The stock profile for Paris on Stockprickr includes the Warner Music Group (which distributed her recent foray into pop music), CBS (subsidiary Simon & Schuster published her book), Amazon (distributes a jewelry line with her name attached), the owners of Carl’s Jr, News Corp (her television show is broadcast on Fox) and the company which makes her perfume line.
“What is amazing is that the Paris stocks outperformed the Dow Jones Industrial Average and the S&P 500 from May 1, shortly before she first went to court, until the day she first went to jail, rising over 10%. However, since her incarceration, the Paris stocks were down about 2.5%,” the StockPickr staff reports.
We're giving Fuld credit for resisting the obvious "Paris goes down in jail" line.
Yesterday Fuld created a Lindsay Lohan index, which also seems responsive to news about the trouble-prone starlet. Stocks associated with Lindsay, however, have not performed as well as those associated with Paris. “During the entire time frame, the Lindsay Index underperformed the Dow and S&P 500, Fuld reports.
The Paris Hilton Trading System [The Big Picture]
Sharpen Your Stilettos -- Here's the Paris Hilton Index []
Lindsay Lohan Stock Index [Stockerblog]