Still, if the results of the Super Bowl exert any influence on the markets – as proponents of the so-called Super Bowl Theory claim – then 2009 should be a good year for investors.
For the “uninitiated,” the theory (invented/popularized by the late New York Times sportswriter Leonard Koppett) says that a win by a team from the old National Football League is a precursor to rising stock values for the year (at least as measured by the S&P 500), but if a team from the old American Football League (AFL) prevails, stocks will fall in the coming year.
This year both teams vying for those Super Bowl rings – the Arizona Cardinals and the Pittsburgh Steelers – have NFL roots (the Arizona Cardinals by way of one time being the St. Louis Cardinals). And that should mean a good year for stocks, no matter which team prevails.
Of course, as even loyal proponents will admit, this theory used to work a lot better than it has in recent years. The most obvious (and recent) proof of that is last year’s Super Bowl XLII, where the New York Giants pulled off a remarkable victory (see Could Perfect Pats Pummel Portfolios?)– but the S&P 500 still shed…well, I don’t need to rub it in here.
In fact, in addition to last year’s results, the Super Bowl Theory came up short every year between 1998 and 2001. Moreover, for those looking for a clear winning strategy, the Super Bowl indicator has had only one “clean” win in the past decade. On the other hand, the Super Bowl Theory has been right about 80% of the time.
Consider that in 2007 the S&P 500 rose 3.53% as the AFC Indianapolis Colts (but by way of once being the NFL’s Baltimore Colts) beat the NFC Chicago Bears 29-17 (see If the Bears Win, Will the Bulls Run?). Of course, according to the Super Bowl Theory, the markets were due for an increase no matter what happened, since both teams were legacy NFL franchises.
Similarly, in 2006 the Pittsburgh Steelers defeated the Seattle Seahawks – but again, both were legacy NFL clubs. That turned out to be a good year for equities, with the S&P 500 closing up more than 13%. Still, it’s hard to count those two years as a “win” (unless, of course, you’re pushing the prognosticative powers of the Super Bowl Theory).
You can consider the AFC New England Patriots’ 24-21 win over the NFC Philadelphia Eagles in 2005. According to the Super Bowl Theory, the markets should have been down for the year. However, in 2005 the S&P 500 climbed 2.55%.
Of course, the 2002 win by those same New England Patriots accurately foretold the continuation of the bear market into a third year (at the time, the first accurate result in five years). But the Patriots 2004 Super Bowl win against the Carolina Panthers failed to anticipate a fall rally that helped push the S&P 500 to a near 9% gain that year, sacking the indicator for another loss.
Consider also that, despite victories by the old AFL Denver Broncos in 1998 and 1999, the S&P 500 continued its winning ways, while victories by the NFL legacy St. Louis (by way of Los Angeles) Rams (with the current Arizona quarterback Kurt Warner calling plays) and the Baltimore (by way of NFL legacy Cleveland Browns) Ravens did nothing to dispel the bear markets of 2000 and 2001.
All in all, the Super Bowl Theory has been on the money more often than not – much more often than not, in fact – but in true sports fashion, has had some winning streaks and some rough patches. Consider that it “worked” 28 times between 1967 and 1997 – then went 0-4 between 1998 and 2001 – only to get back on track from 2002 on (purists still dispute how to interpret Tampa Bay’s victory in 2003, since the Buccaneers spent their first NFL season in the AFC before moving to the NFC).
As for Sunday – the oddsmakers seem to want to give the edge to the Steelers, though to my ears they are taking more-than-customary pains to hedge their bets – outlining all kinds of ways in which the Cardinals could prevail.
It looks like it could be a good game – and that, whether you are a proponent of the Super Bowl Theory or not – would be one in which whoever wins, we all will!
Note: Other exceptions included: 1970, when AFC Kansas City won, and the S&P index gained 0.1%; 1984, when AFC Los Angeles Raiders won, and the S&P rose 1.4%; 1990, when NFC San Francisco prevailed, and the S&P lost 6.56%; and 1994, when NFC Dallas triumphed, but the S&P index fell 1.53%.