One Up On Wall Street: How To Use What You Already Know To Make Money In

by Peter Lynch

If there is a Monday effect, I think I know why. Investors can’t talk to companies for two days over the weekend. All of the usual sources of fundamental news are shut down, giving people sixty hours to worry about the yen sell-off, the yen bid-up, the flooding in the Nile River, the damage to the Brazilian coffee crop, the progress of the killer bees, or other horrors and cataclysms reported in the Sunday papers. The weekend is also when people have time to read the gloomy long-term forecasts of economists who write guest columns on the op-ed pages. Unless you’re careful to sleep late and ignore the general business news, so many fears and suspicions can build up on weekends that by Monday morning you’re ready to sell all your stocks. That, it seems to me, is the principal cause of the Monday effect. (By late Monday you’ve had a chance to call a company or two and find out that they haven’t gone out of business, which is why stocks rebound the rest of the week.)