For the “uninitiated,” the theory says that a win by a team from the old National Football League is a precursor to rising stock values for the year, but if a team from the old American Football League prevails, stocks will fall.
Could such an odd indicator really work? Believe it or not, since the first Super Bowl was played in 1967, the so-called Super Bowl indicator has been wrong just 8 times. Unfortunately for those looking for a clear winning strategy, the Super Bowl indicator has had only one clean win in the past seven big games.
Consider that, in 2002, the win by the AFL-born New England Patriots accurately foretold the continuation of the bear market into a third year. But those same Patriots prevailed against the Carolina Panthers in 2004 – and a fall rally helped push stocks into positive territory, sacking the indicator for another loss (see Panther Win, Bulls Run? ).
Consider also that, despite victories by the old AFL Denver Broncos in 1998 and 1999, good times rolled on, while victories by the St. Louis (by way of Los Angeles) Rams and the Baltimore (by way of Cleveland Browns) Ravens did nothing to dispel the bear markets of 2000 and 2001.
There was some ambiguity in Tampa Bay’s victory in 2003 over the Oakland Raiders (see Super Bowl Signs Ominous for Stocks ). The latter team was clearly from the old AFL, so under the Super Bowl indicator, their victory would have meant another year of red ink for investors. However, the game’s eventual winner, Tampa Bay, was not even a gleam in Pete Roselle’s eye when the first Super Bowl was played. The Bucs were not only the first “pure” expansion team formed since the merger of the NFL and AFL, they had actually spent their first season in the American Football Conference before moving to the National for the rest of the franchise’s history.
So, while Oakland’s loss could be taken as a loss by the old AFL, did Tampa’s win really count as an NFL win? In fact, in four of the past five years (including last year), at least one of the teams in the Super Bowl was formed after the merger, or changed its name when it moved – making application of the Super Bowl indicator every bit as much art as science.
However, this year we not only have the Patriots – an old AFL legacy – and the Eagles – unquestionably an old NFL stalwart.