Stocks Swayed by the Super Bowl?
Will your portfolio soar with the Seahawks, or get kicked by the Broncos? That’s what adherents of the so-called Super Bowl Theory—which maintains that when a team from the old National Football League wins the Super Bowl, the S&P 500 will rise, whereas should a team from the old American Football League prevail, stock prices would be expected to fall—would likely predict. Sure enough, last year’s victory by the Baltimore Ravens (who, it might be recalled, are really a legacy NFL team via their Cleveland Brown roots) coincided with a 29.6 percent gain for the S&P 500. Moreover, the indicator has been correct 37 of the last 47 years, or nearly 79 percent of the time. Not only has the Super Bowl Indicator consistently predicted the direction of the market, but returns when the old NFL wins and when the AFL wins are dramatically different, according to a recent report in the Wall Street Journal , which notes that the Dow has averaged a healthy 11.6 percent...