LPWMG

If you are one of the 92 million people tuning in this weekend to see the NFC Rams play the AFC Bengals, you might have an interest in this non-scientific fact. The Super Bowl Indicator is a spurious correlation that says that the stock market's performance in a given year can be predicted based on the outcome of the Super Bowl of that particular year.

The non-scientific term was coined in 1978 by New York Times sportswriter, Leonard Koppett and for many years it was surprisingly accurate (more on that in a minute). This pseudo-macroeconomic concept states that if a team from the American Football Conference (AFC) wins, then it will be a bear market (or down market), but if a team from the National Football Conference (NFC) or a team that was in the NFL before the NFL/AFL merger wins, it will be a bull market (up market). As of February 2021, the indicator has been correct 40 out of 54 times, as measured by the S&P 500 Index – a success rate of 74%. However, Mr. Koppett’s decision to include the pre-merger teams on the side of the NFC may have skewed the results a bit. The Pittsburgh Steelers date back to 1933 as one of the original NFL franchises. According to his logic, their league leading 6 super bowl titles count as NFC wins, even though they won each Super Bowl as a team from the AFC. This is one of many reasons I’ll enjoy watching the Super Bowl on Sunday without giving much thought at all to the outcome of the game predicting 2022 market returns … I hope that you will do the same.