The Super Bowl is the biggest sporting event of the year. Did you know it is also a great predictor of the market?
There is a simple but interesting pattern known as the Super Bowl Indicator. It was noticed in the 1970s by the sportswriter Leonard Koppett. Koppett realized that whenever a team from the AFC won the Super Bowl, that year’s stock market would be bearish. Whenever an NFC team won, the stock market would be bullish for the year. This predictor had never been wrong since he noticed it. It is a small sample of data, though, with the first one played recently in 1967.
So how has it done since then? Take a look at the S&P 500 each year. Since the year 2000, this method of predicting the stock market has been correct 12 times and wrong only 5. Taking the whole set of results into account, these figures look even better. According to an article by The Wall Street Journal, there have been 40 correct guesses and only 10 wrong ones as of 2017.
You need to forgive one extra bad result, which is the New York Giants win of 2008. This was a bad year for the markets, despite the Giants being an NFC team.
So next Super Bowl, you can feel happier to cheer for an NFC team because you are often also cheering for prosperity. Except maybe if you are cheering for the Giants.