The Super Bowl Indicator and Stock Market Performance

The Super Bowl Indicator is based on the theory that if a team from the AFC division (the old AFL) wins, the stock market is destined to decline in the coming year. A win from the NFC division (the old NFL) indicates that the market is bound for a rally in the year ahead. While no ration person or investor ties the future performance of the market to the outcome of a game, the indicator has been surprisingly accurate- about 80% correct.

The Accuracy of the Super Bowl Indicator

Until 1998, the Super Bowl Indicator had been just about the most reliable predictor of stock market performance. At that time, the indicator had proven correct in 28 out of 31 years. The indicator then proved wrong in each of the next four years before rebounding- going 4 out of 5 from 2002 – 2007 (2003 is not included as the Tampa Bay Buccaneers were an expansion team).

While the Giants victory over the Patriots in 2008 indicated the coming of a bull market, the indicator proved no match for the credit crisis and economic turmoil the year would bring.

Explaining the Success of the Indicator

Even so, many have wondered how the Super Bowl Indicator has generally proven to be reliable for so many years. The prevailing theory is that more teams in the leaguer are tied to the NFC than the AFC and the market goes up more frequently than it goes down.

Other Strange Indicators

Inspired by the Super Bowl Indicator, a number of researchers have sought out other indicators that with seemingly no bearing on stock market performance that have demonstrated a correlation. Some of the findings include butter production in Bangladesh and ice cream consumption.

Stock market investors in search of a market rebound should take heart- each of the four remaining teams going into this weekend’s games has roots in the old NFL.

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The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax advisor.

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