Post-Super Bowl LII Update:
The Philadelphia Eagles pulled off one hell of game! They did it! They’re Super Bowl Champions for the first time in team history and are bringing the Lombardi Trophy back to Philly!
So don’t worry about the 1,175 (-4.6%) price drop on Monday, the day after the Super Bowl (and the biggest point decline in history). The Super Bowl Indicator means that stocks are headed up for the year…. right?
I hope everyone’s excited for Super Bowl 52 this Sunday!
What’s that? You don’t like football?
Well you better watch anyways, because the winner of the Super Bowl will determine if stocks are heading up or down in 2018.
Are you a Philadelphia Eagles fan? You might want to start buying stocks.
New England Patriots fan? Better start selling.
The Super Bowl Indicator
Okay, so the winner of the Super Bowl won’t really have any effect on stocks – but there is a very interesting phenomenon going on (even if it is random).
It’s called the Super Bowl Indicator:
This means that a sixth Super Bowl victory by Tom Brady, Bill Belichick, and company on Sunday would send the stock market into negative territory for the rest of the year. However, if the disrespected, underdog Eagles come through to pull-off yet another upset and win Philly’s first ever Super Bowl, then the stock market will rise by the end of the year.
Incredibly, the Super Bowl Indicator has had a near 80% success rate, correctly predicting the direction of the Dow Jones Industrial Average’s movement in 40 of 51 Super Bowl years.
The Indicator had a 7 year streak going until last year, when the Denver Broncos dominated the Carolina Panthers in Super Bowl 50. And before the Dot Com craze of 1998-2001 (during which the Indicator went 0-4), the Indicator had been accurate 90% of the time!
(Can you really fault the Super Bowl Indicator though? 2008 was the year of the famous David Tyree Helmet Catch – which has become one of the most iconic plays in Super Bowl history and set up the New York Giants for the game-winning TD with 35 seconds left to seal the upset victory.)
The Super Bowl Indicator was popularized by Wall Street analyst Robert H. Stovall, who credits the original idea for the indicator to a NY Times sportswriter, Leonard Koppett, who discovered the correlation back in 1978.
Stovall, now 91, is the first to admit that “There is no intellectual backing for this sort of thing except that it works.”
See: 9 Cognitive Biases You Need to Understand to Master Your Money
Super Bowl LII: The New England Bears vs. The Philadelphia Bulls
But correlation without causation doesn’t mean we can’t have fun with the Super Bowl Indicator.
With the DJIA essentially up ever so slightly this year, I’m guessing that Super Bowl LII is gonna be a close one!
What do you think?!