Opinion: the Bucs, not the Chiefs, will win one for the bulls if the Super Bowl indicator is correct


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Would a Tampa Bay victory in this year’s Super Bowl be good for the US stock market? For fans of the famous Super Bowl Flag, this is an important question. The Super Bowl gauge predicts that stocks will rise if the winner of the game has roots in the original National Football League before its merger with the American Football League in 1966, and will fall if the winning team can trace its roots back to AFL.

Tampa Bay has no roots in any of the leagues, as it is an expansion team that joined the NFL in 1976. So, for an accurate interpretation of what an expansion team win would mean, I looked at the files to find out what the creator of the indicator had to say. It was Leonard Koppett, a baseball Hall of Famer and sports writer; his first mention of the indicator, as far as I know, was in Sporting News in February 1978. Unfortunately, Koppett, who died in 2003, did not provide consistent advice on how to interpret an expansion team win. In a 1989 article for the New York Times, for example, Koppett wrote that according to his gauge, stocks will rise from Super Bowl Sunday through the end of the year as long as the winning team cannot trace its roots back to the original AFL. That would suggest, by interpretation, that a victory at Tampa Bay would be bullish for the stock market. But in another article after Tampa Bay won the Super Bowl in 2003, Koppett wrote that his indicator “had nothing to say” about how the stock market would perform that year. To calculate the history of the indicator, I have used Koppett’s formulation of 1989. That improves the history of the Super Bowl Indicator, as the stock market rose strongly in 2003. However, even with that additional boost, the indicator does not has had no value: the chances of the stock market going higher have been higher from a bearish indicator prediction than from a bullish prediction. This was largely the case in 2020. Kansas City, an original AFL team, won the 2020 Super Bowl, and far from falling from then until the end of the year, the S&P 500 SPX, + 0.39% gained 16.4% ( before dividends). The record of the indicator for several decades is in the table below. Notice that I calculated the odds from 1978, which is when Koppett first wrote about the Super Bowl indicator. Up until that point, it had a perfect track record: The S&P 500 went up every time an original NFL team won, and it went down every time an original AFL team won. But it is a big statistical no-no to calculate the history of an indicator with the data originally used to “discover” it in the first place.

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The so-called real-time tests are a gold standard in statistical analysis, since only in this way can the probability that the previous correlation was simply a fluke can be reduced. Needless to say, the Super Bowl indicator fails a real-time test. The oil tanker that goes to heaven Before leaving the topic of the Super Bowl Indicator, I want to address one of the most curious comebacks for analysis such as the one I present here. Some insist that the indicator is still valid, although they acknowledge that its statistical record is worthless. What makes it worth pursuing, they say, is that enough clueless and gullible investors think it’s worth it. Koppett himself had little patience with this line of argument. He presented the Super Bowl flag as a joke, not something to be taken seriously. However, when the indicator became fashionable, he said it was a “disgrace”. Near the end of his life, he wrote that it would be a “relief” if the indicator could be declared “dead as a nail.” Koppett’s struggle with his “joke” reminds me of another that illustrates his point. This other was recounted by Warren Buffett several years ago; Benjamin Graham, the father of fundamental analysis and author of The Intelligent Investor, allegedly told him: An oil tanker dies and San Pedro tells him that although he deserves to enter heaven, there is no more space because there are already too many oil tankers. The oilman asks him if it is okay for him to try to convince some of the oilmen already in heaven to go to hell, thus opening a place for him, and San Pedro agrees. The tanker finds a tanker convention in heaven and yells at them that oil has been discovered in hell. Pretty soon there’s a steady stream of them heading straight for Hell, surprisingly with our recently deceased tanker following on their heels. When asked why he was rejecting a spot in the sky, the tanker replied that, you never know, the rumor about the oil discovery could be true. Don’t become the butt of the Koppett or Buffett joke. Mark Hulbert is a regular contributor to MarketWatch. Your Hulbert Ratings tracks investment bulletins that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com More: Dr. Fauci cautions against Super Bowl parties: ‘Just keep calm and cool down’ Plus: Dolly Parton talks about her ‘5 to 9’ Super Bowl commercial and her donation of $ 1 million COVID-19 Research