The Super Bowl and the Stock Market

It's time to revive that old chestnut, the Super Bowl Market Predictor. First, let me say up front that I'm not a huge NFL fan. Generally, I reserve my interest to college football. All other sports I try to keep up a small level of interest to provide something to discuss with strangers - but there's no real passion or interest.

The lone exception might be the Super Bowl. And there my interest is largely statistical and, in a minor way, financial. I speak of the Super Bowl Stock Market Predictor. For those of you unfamiliar with this piece of minutiae, there's a very good explanation in today's issue of The Wall Street Journal.

The upshot is, since the inception of the Super Bowl, the winner of the Super Bowl is an indicator of the performance of the stock market for the year. Specifically if the winner is one of the original NFL teams (we're talking pre-merger with the AFL in the 1960s), the market will finish the year higher. This group basically includes the current NFC teams, plus Indianapolis and Pittsburgh. (Steelers fans can insert cheer here as the inclusion of the latter seems to help the statistic a bit.)

If the Super Bowl is not won by one of the original NFL teams (read as most of the AFC including the New England Patriots), the market will finish the year lower. This quirk seems to be correct about 81% of the time.

Now, I will not make any investment decisions based on the outcome of this game, but I like to see my portfolio grow as much as the next person. Consequently, with no real prior interest in this NFL season, I will have to admit that my sympathies will be leaning a bit towards the Giants. And for those of you who have more interest in this than I do, it might be one more reason to hate the Patriots. Personally, I don't hate the Patriots. I know a number of people up in Boston who will likely be pulling for their home team, and rightfully so. I wish them well. But I will be interested in the outcome of this NFL game.

P.S. This might be an excellent time to bring your economics students back to the discussion of the difference between coincidence, correlation and causality. I look forward to your comments.