In fact, since the first Super Bowl was played in 1967, the so-called Super Bowl indicator has been wrong just 7 of 36 times.
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.
Not surprisingly perhaps, the irrational exuberance of the late 1990s – and the sometimes equally irrational “inexuberance” of the past three years – have been as tough on this indicator as any of a number of more sophisticated models. 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. However, those “upstart” Patriots from the old AFL got things back on track (so to speak) by winning – giving stocks their signal to slide.
Here and Now
Which of course brings us to the contest this weekend. The favored Oakland Raiders are from the old AFL, so a victory for the Silver and Black could portend another year of red ink for investors.
But it’s not clear what a Tampa Bay victory might mean. A report on CNN/Money reminds us that the Buccaneers are the first “pure” expansion team formed since the merger of the NFL and AFL. In the franchise’s founding year, it played in the American Football Conference, the successor to the old AFL.
But the next year the club was moved to the National Football Conference, where it has remained since (some will no doubt remember the infamous 0-26 streak of the early days, as well as the so-close-but-no-cigar playoffs of the 1979 season where the Bucs lost to the L.A. Rams in the NFC title game).
So which is it? The writer of the CNN/Money article says that the team is “closer to being an AFL creation rather than an old NFL team,” at least according to its roots. If so, then no matter which team wins, the market falls, according to the Super Bowl Indicator.
Me? I’m just worried that this is the market’s not-so-subtle way of telling us there’s no way to “win.”
So, just in case…Go Bucs!