Sorry Ram Fans….Go Bengals? | Dear Mr. Market:


Dear Mr. Market:

The investment world has not given us much of a break lately. Everything is down….everything…..except gold and emerging markets, but you saw that coming, right?!? Before we dive in, let’s just post some quick year to date numbers and then get to the football banter. Large Caps are down -5.4%, Mid Caps -4.2%, Small caps -5.9%, International -8.1%, and Bonds (which are supposed to shelter us from some of this near-term pain) are down -3.2%. Again, the only thing that is up YTD is Gold at +0.10% and Emerging Markets at +2.5%. Switching gears, allow us to lighten the mood and focus on something mildly entertaining (yet related to the stock market). Why should you be rooting for the Cincinnati Bengals this Sunday during Super Bowl XVI?

All kidding aside, and at the risk of upsetting any Los Angeles Rams fans, the AFC teams winning lately have been good for the bulls. What we’re talking about here is the Super Bowl Indicator. At a minimum this is a helpful article for you if you don’t have a “dog in the hunt” and your team lost weeks ago, never made the playoffs, or you could care less about football yet might be around people who do on Sunday.

In 1978, Leonard Koppett, a sportswriter for the New York Times, came up with the Super Bowl Indicator and for many years it was never wrong! Up until that point the results pointed towards NFC teams winning being the one that seemed to help the stock market the most.

The Super Bowl Indicator is a nonscientific stock market gauge. It’s as silly and meaningless as any of the others but believe it or not, many people followed it at one time. It’s based on a theory that a Super Bowl win for an American Football Conference (AFC) team points to a decline in the stock market in the coming year. Conversely, a win for a team from the National Football Conference (NFC) means that the stock market will rise. Up until recently if the NFC team won…so did you and your investments. We won’t get into it here but perhaps that’s due to Tom Brady and all that he’s accomplished over the past 20 years.

Full disclosure….Please don’t take any of this seriously and make any trades based on who wins the game! At one point in time, however, the team who won the game was eerily predictive of what the stock market would do for the remainder of the year. Going into last year (2021) the indicator was correct 40 out of 54 times! A 74% success rate is a heck of a lot better than how most people do in Vegas…

As with anything nowadays…there is a rather serious asterisk or caveat to that statistic. At the time of the study the 6-time winning Pittsburgh Steelers were considered part of the NFC Conference!

Have fun this weekend. Enjoy the game and while this article was meant to share some harmless fun related to the big game…we will actually leave you with one extremely solid tip.

Whatever you do….do NOT bring this factoid up to a hardcore football fan who is deeply entrenched in the game. Not only could you get punched but at a minimum you’ll likely never be invited to another Super Bowl party.


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