Superstitious investors will be rooting for the Seattle Seahawks to
defeat the New England Patriots in Super Bowl XLIX on Sunday,
Feb.1.
That’s because the “Super Bowl Indicator” tells us a Seahawks
victory will propel the markets higher in 2015.
This might sound absurd, but the Super Bowl Indicator is
strangely accurate… In fact, it’s been right more than 80% of the
time.
The Super Bowl Indicator was created in 1978 when a
New York Times
article showed the correlation between Super Bowl champion and
market performance. Originally, the indicator stated that if an
original NFL team won the Super Bowl, a bull market would occur
that year. If an original AFL team won, there’d be a bear
market.
The Super Bowl Indicator has been altered since its conception
in 1978. Through the 1970s and 1980s, the NFL vs. AFL lines were
followed strictly. But numerous division realignments and expansion
teams have blurred the lines.
To make things easier, “experts” now differentiate along the two
conference lines. NFC teams represent a bull market and AFC teams
represent a bear market. That’s why investors will root for the
NFC’s representative, Seattle.
Just take a look at how many times the indicator has been
right…
Super Bowl Indicator: Examining the 80% Success Rate
The Super Bowl Indicator also has an 80% success rate over the
past five years:
-
Last year the Seattle Seahawks defeated the Denver Broncos 43-8.
For the full-year 2014 the Dow Jones gained 8.2%. The SP 500
rose 11.8%.
- When the New York Giants (NFC) won the Super Bowl in 2012,
the Dow gained 5.9% and the SP 11.5%.
- In 2011, the Green Bay Packers (NFC) won the game and the Dow
climbed 5.5% while the SP remained flat.
- The 2010 Super Bowl saw the New Orleans Saints (NFC) claim
victory. The Dow and SP gained 12% and 14% respectively that
year.
- The one time the indicator was wrong in the past five
years – in 2013 – the Baltimore Ravens (
AFC) were crowned Super Bowl champions and the markets surged. The
Dow Jones finished 2013 up 27%. The SP 500 gained 31%. This
is the indicator’s only miss in the last five years.
The Indicator has a pretty accurate track record in the
Patriots’ three Super Bowl victories as well. Two of New England’s
three wins have been followed by down years for the markets.
After the Patriots won the Super Bowl in 2002, the Dow dipped
18% for the year.
The Patriots won the Super Bowl again in 2004, and that year the
Dow performed better, up 4.4%. That year the indicator was
wrong.
Following New England’s third Super Bowl title in 2005, the Dow
finished down 0.6%.
Of course, we suggest putting more research into your
investments than simply waiting to see who hoists the Lombardi
Trophy. But if the Seahawks win and the market ends higher for
2015, that’s yet another winning year for the Super Bowl
Indicator.
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