MoneyWeek issue 94 cover image

Turning to drugs

25 July 2008 / Issue 394

How to profit from pharmaceuticals... PLUS:

• Why it’s time to take profits in mining stocks

• Is it worth investing in death futures?

• Bill Bonner on why capitalists are stupid

Excerpt

How fashion predicts the future

I’ve been to two weddings over the last two weekends and in doing so noticed something odd about the female guests: they’ve all been wearing long dresses. You expect this from the bride, obviously, but not, in general, from the guests. However, as a trend it fits in very neatly with the theory of the hemline indicator – that when things are bad for the economy, fashion designers drop skirt lengths and when things are good they raise them.

Look back across the decades and this seems to hold good. In the 1920s hemlines rose. In the 30s they fell. In the 50s and early 60s they inched their way back up – until they barely covered our mothers’ knickers in the mid-60s. They fell back in the 70s, only to soar again in the 80s. The last few years have seen the return of the ‘midi’ (calf-length) and now, as we enter what will surely be a full-blown recession, possibly accompanied by a political crisis, we have the full-on ankle-length ‘maxi’ as modelled by Angelina Jolie throughout her seemingly endless pregnancy.

• Read the full editor’s letter here: How fashion predicts the future