Super Bowl Indicator

What Is the Super Bowl Indicator?

The Super Bowl Indicator is a nonscientific stock market barometer. The reason of the Super Bowl Indicator is the theory that a Super Bowl win for a team from the National Football League's American Football Conference (AFC) predicts a decline in the stock market (a bear market) in the impending year. On the other hand, a success for a team from the National Football Conference (NFC), as well as teams from the original National Football League (NFL) — before the merger of the NFL and the American Football League (AFL) in 1966 — means that the stock market will rise in the approaching year (a bull market).

Leonard Koppett, a sportswriter for The New York Times, first presented the Super Bowl Indicator in 1978. Up until that point, the Super Bowl Indicator had never been off-base.

Figuring out the Super Bowl Indicator

At a certain point in time, the Super Bowl Indicator flaunted an over 90% achievement rate in foreseeing the up-or-down outcome of the S&P (Standard and Poor's) 500 before the Dot Com years (1998-2001). In any case, the familiar adage applies: Correlation doesn't suggest causation.

The indicator has one exceptionally glaring caveat: It counts the Pittsburgh Steelers, a team with a NFL-driving six Super Bowl wins on the whole, in the NFC, on the grounds that that is where the team started out back in 1933, as an original NFL franchise. It apparently doesn't make any difference that Pittsburgh won all its Super Bowls as an AFC team. Doubters note that the Steelers won 27% of the Super Bowls when it asserted its third for the 1978 season, the year when the index started out. Some contend that Koppett incorporated the caveat about original NFL teams from the AFC basically considering NFC teams inside the indicator thus.

As of Feb. 2021, the indicator has been right 40 out of 54 times, as estimated by the S&P 500 Index. This is a triumph rate of 74%. It failed to foresee a down market in both 2016 and 2017, when the Denver Broncos and New England Patriots, both original AFC teams, won Super Bowls. Likewise of note: In 2008, regardless of the New York Giants (NFC) winning the Super Bowl, which probably indicated a bull market, the stock market experienced one of the biggest downturns since the Great Depression.

The Super Bowl Indicator is an illustration of simply fun games composing. There is no real association between a football team in a specific league and the U.S. stock market; thus, any relationship that can be drawn between the two is simply an incident. What started as an intriguing column quite a while back keeps on making another headline no less than one time each year.

For of foreseeing the stock market, the Super Bowl Indicator is totally irrelevant: There's not a great explanation to accept that the champ of a football game directs the performance of the stock market. Notwithstanding, that hasn't stopped individuals from talking and expounding on it for the past forty years.

S&P 500 Performance Over Past Super Bowls