The Wall Street Journal published the updated results of the Super Bowl predictor:
Bullish investors who look at an unscientific but popular indicator will be rooting for the Los Angeles Rams on Sunday when they face the New England Patriots in the Super Bowl.
The Super Bowl Predictor—popularized by market analyst Robert H. Stovall— foretells the stock market for the full year based on who wins the big game in February.
The quirky indicator, which has even been studied by academics, goes like this: Stocks go up for the calendar year if an original National Football League team (like the Rams) wins, but down if the winner is from the old American Football League (like the Patriots). Teams added after the two leagues’ long-ago merger count for either the National or American side depending on which of today’s two conferences they play in.
But after a strong run of success, the Predictor has misfired for three straight years. It now has been accurate after 40 of the 52 Super Bowls, or a 77% rate.
That’s better than most of the scientific indicators that Wall Street uses, but still…
It didn’t work for 2018 because the Philadelphia Eagles’ win incorrectly predicted that the stock market would rise in 2018. It looked good for a while but was ultimately a fumble. Not even a replay challenge can change that market result.
The Eagles have now been to three Super Bowls in their history: 1981, 2005 and 2018. The first two times, they lost, and the Dow fell, so the Predictor worked. But last year, the market didn’t follow the Eagles’ winning lead.
If New England wins its second Super Bowl in three years, bulls will be hoping for a repeat of 2017, when the Predictor failed and stocks surged following a Patriots victory.
Please note this is just for fun and if you incorporate this as part of your investment process please give me a call!
Stay Tuned, Disciplined & Patient! {TJM}
The Investor & Character Equation (ICE) | S + R = O
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