Investors often try every which way to gauge future stock market performance. Most theories consider past performance, current events, and other relevant factors that could swing the market in a certain direction.
There are also an abundance of odd theories and indicators that are not so tied to the market, such as The Sports Illustrated Swimsuit Edition Cover Model Indicator, The Big Mac Indicator and The Super Bowl Indicator.
History and Accuracy
The Super Bowl Indicator assigns an outcome for the Dow Jones Industrial Average over the following year based on which conference wins the game. For instance, if the NFC team in the Super Bowl wins, the theory indicates that the index will end the year in positive territory. If the team representing the AFC wins, the Dow Jones will end in negative territory.
Since the beginning of the Super Bowl Era, the indicator has been accurate about 74% of the time, or 40 out of the 54 years. The theory was coined in the late 1970s by a New York Times sports reporter named Leonard Koppett.
From 1967-2015, the indicator was correct all but nine times. Over the past five years however, the indicator has been wrong every year. For investors who want to believe that the Super Bowl Indicator has legitimacy, it can be noted that over the past 10 years since the 2008 Financial Crisis, we have been in a bull market and the last five years the NFL has been dominated by two AFC teams. In the previous five years following the financial crisis, NFC teams won four of the five super bowls, aligning with the first five years of the longest bull market in recent memory.
Searching for Patterns
Searching for patterns is not only common in investing, but also for sports in general. For example, the buzz around the 2021 Super Bowl is about Tom Brady, the Tampa Bay Buccaneers quarterback who is playing in his 10th Super Bowl, by far the most ever. Two trends I have heard are that Tom Brady has won all his super bowls when his team was wearing white, and that in his nine previous Super Bowls, he is 6-1 against teams whose mascots are animals, and 0-2 against teams without animals as their mascots.
Of course, the color of their jerseys and the opposing team’s mascots have no effect on the game, but does that mean that the relationships are completely meaningless and should be tossed out? Leonard Koppett, the founder of The Super Bowl Indicator, would likely think of these trends as unreliable, just as he does of the AFC-NFC trend he discovered.
We will see this year if The Super Bowl Indicator will be incorrect for a sixth consecutive time or if it will add to its surprisingly accurate track record.
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