The Super Bowl Indicator and The Stock Market

Can the winner of the Super Bowl predict the performance of the stock market? Investors are always looking for a way to tilt the odds in their favor and the Super Bowl Indicator is one that some actually believe in.

According to Wikipedia (so you KNOW it’s accurate),The Super Bowl Indicator is a spurious correlation that says that the stock market’s performance in a given year can be predicted based on the outcome of the Super Bowl of that year. It was “discovered” by Leonard Koppett in the 1970s when he realized that it had never been wrong, until that point. This pseudo macroeconomic concept states that if a team from the American Football Conference (AFC) wins, then it will be a bear market (or down market), but if a team from the National Football Conference (NFC) or a team that was in the NFL before the NFL/AFL merger wins, it will be a bull market (up market).

As of January 2020, the indicator has been correct 40 out of 53 times, as measured by the S&P 500 Index – a success rate of 75%.

Last year, the Tampa Bay Buccaneers won the Super Bowl and the market was up. That being said, the Super Bowl Indicator was wrong the previous 5 consecutive years. Sadly, Koppett’s discovery was nothing more than pure coincidence. So investors are stuck focusing on those few things over which they have control; risk tolerance and time horizon. Sorry to be the one to throw a wet blanket on the Super Bowl Indicator party.

If you automatically increase your retirement savings each year, which many 401(k) plans now offer as a setting, you’ll find it a far more useful predictor of financial success than the Super Bowl Indicator. Put another way, the Detroit Lions are more likely to win the Super Bowl than the Super Bowl Indicator is to be a useful predictor of stock market success. GO LIONS!!