Practical analysis for investment professionals
31 January 2014

Weekend Reads for Investors: The Super Bowl Indicator

Posted In: Weekend Reads

This weekend approximately half of US households will be watching the Denver Broncos and Seattle Seahawks compete in the 48th edition of the National Football League’s Super Bowl. It is typically a time when stock market observers cast seriousness aside and consider what the game’s outcome will mean for equity prices by examining the Super Bowl Indicator. First proposed in 1978, this theory holds that stocks will rise in the coming year if an original NFL (pre-merger with the American Football League in 1970) franchise wins, but will fall if an old AFL team wins.

In its history, this signal has correctly called the direction of the broad market roughly 80% of the time. However, discerning investors will distinguish correlation from causality and instead focus on simply enjoying the game. For the record, neither Denver nor Seattle is an original NFL franchise, which portends a down year for stocks, no matter the outcome.

Here are some stories you may have missed in recent weeks:

Behavioral Matters

Strategic Thinking

High Profiles

Shareholder Values

Emerging Markets

Odds & Ends

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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About the Author(s)
David Larrabee, CFA

David Larrabee, CFA, was director of member and corporate products at CFA Institute and served as the subject matter expert in portfolio management and equity investments. Previously, he spent two decades in the asset management industry as a portfolio manager and analyst. He holds a BA in economics from Colgate University and an MBA in finance from Fordham University. Topical Expertise: Equity Investments · Portfolio Management

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