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.
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 email@example.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