Investors should root for the 49ers this weekend
The market loves the team, offering the best returns in the years when San Francisco plays in the Super Bowl.
By Victor Reklaitis and Tom Bemis, MarketWatch
So who ya rootin' for in the NFL playoffs this weekend?
If you're a stock-market bull, you may want to pull for the San Francisco 49ers.
The Super Bowl Indicator holds that any NFC team winning the Super Bowl is bullish for stocks. It’s worked 80 percent of the time since the Super Bowl began in 1967.
But if you take a close look at the S.B.I.'s performance, you'll see the stock market LOVES the 49ers.
In fact, win or lose, San Francisco has been in the Super Bowl in four of the five best years for the stock market since the big game between the NFC and AFC champs began in 1967.
The Niners' Super Bowl wins in 1985, 1989 and 1995 were followed by annual gains of 27.7 percent, 27 percent and 33.5 percent, respectively, for the Dow Jones industrials ($INDU). From 1967 to last year, only the Pittsburgh Steelers' victory in 1975 delivered a bigger advance.
Even in 2013, when San Francisco lost to the Baltimore Ravens, the market boomed.
So S.B.I. believers don't want just any old NFC team to triumph over the AFC champion in the Super Bowl. Under this thinking, it's best for your portfolio to have the 49ers beat the Seattle Seahawks in Sunday’s NFC championship -- and then win the big game itself on Feb. 2.
Of course, the Super Bowl Indicator is a classic example of confusing correlation with cause and effect. MarketWatch's Mark Hulbert took the whole faulty concept to the woodshed in a column last year.
As he blasted "spurious correlations," Hulbert pointed out that Bangladeshi butter production is an even better "indicator" for stocks. Perhaps the S.B.I. should be renamed the B.S.I.
Of the nine years when the S.B.I. has failed, four involved Super Bowl appearances by the Denver Broncos -- who play the New England Patriots on Sunday in the AFC Championship.
So you may want to be wary of the Broncos -- and also the Patriots. The best performance in years when the Pats won it all was a 3.1 percent gain in 2004. The worst was a 16.8 percent drop in 2002. And the Patriots’ loss in 2008 to the New York Giants was followed by Wall Street’s worst year since the Super Bowl began, a 33.8 percent slide in the Dow.
Seattle's only Super Bowl appearance in 2006 was a loss to the Pittsburgh Steelers. The Dow surged that year. (Although the Seahawks are in the NFC, the Steelers have their roots in the old NFL, and for the purposes of the indicator are deemed to be an NFC team, meaning the indicator is deemed to have held that year.)
Overall, you can see the prediction business is tough. Just ask all those Wall Street strategists who haven't exactly been spot on.
Check out the table below to learn more about how the Super Bowl Indicator has performed when your team has been in the hunt. Just click on the headers of each column to sort by year, winning team, the Dow's percentage change that year, etc.
|Year||Winner||Dow % change||Indicator worked?||Loser|
|1967||Green Bay Packers||15.20%||Y||Kansas City Chiefs|
|1968||Green Bay Packers||4.30%||Y||Oakland Raiders|
|1969||New York Jets||-15.20%||Y||Baltimore Colts|
|1970||Kansas City Chiefs||4.80%||N||Minnesota Vikings|
|1971||Baltimore Colts||6.10%||Y||Dallas Cowboys|
|1972||Dallas Cowboys||14.60%||Y||Miami Dolphins|
|1973||Miami Dolphins||-16.60%||Y||Washington Redskins|
|1974||Miami Dolphins||-27.60%||Y||Minnesota Vikings|
|1975||Pittsburgh Steelers||38.30%||Y||Minnesota Vikings|
|1976||Pittsburgh Steelers||17.90%||Y||Dallas Cowboys|
|1977||Oakland Raiders||-17.30%||Y||Minnesota Vikings|
|1978||Dallas Cowboys||-3.10%||N||Denver Broncos|
|1979||Pittsburgh Steelers||4.20%||Y||Dallas Cowboys|
|1980||Pittsburgh Steelers||14.90%||Y||Los Angeles Rams|
|1981||Oakland Raiders||-9.20%||Y||Philadelphia Eagles|
|1982||San Francisco 49ers||19.60%||Y||Cincinnati Bengals|
|1983||Washington Redskins||20.30%||Y||Miami Dolphins|
|1984||Los Angeles Raiders||-3.70%||Y||Washington Redskins|
|1985||San Francisco 49ers||27.70%||Y||Miami Dolphins|
|1986||Chicago Bears||22.60%||Y||New England Patriots|
|1987||New York Giants||2.30%||Y||Denver Broncos|
|1988||Washington Redskins||11.80%||Y||Denver Broncos|
|1989||San Francisco 49ers||27.00%||Y||Cincinnati Bengals|
|1990||San Francisco 49ers||-4.30%||N||Denver Broncos|
|1991||New York Giants||20.30%||Y||Buffalo Bills|
|1992||Washington Redskins||4.20%||Y||Buffalo Bills|
|1993||Dallas Cowboys||13.70%||Y||Buffalo Bills|
|1994||Dallas Cowboys||2.10%||Y||Buffalo Bills|
|1995||San Francisco 49ers||33.50%||Y||San Diego Chargers|
|1996||Dallas Cowboys||26.00%||Y||Pittsburgh Steelers|
|1997||Green Bay Packers||22.60%||Y||New England Patriots|
|1998||Denver Broncos||16.10%||N||Green Bay Packers|
|1999||Denver Broncos||25.20%||N||Atlanta Falcons|
|2000||St. Louis Rams||-6.20%||N||Tennessee Titans|
|2001||Baltimore Ravens||-7.10%||N||New York Giants|
|2002||New England Patriots||-16.80%||Y||St. Louis Rams|
|2003||Tampa Bay Buccaneers||25.30%||Y||Oakland Raiders|
|2004||New England Patriots||3.10%||N||Carolina Panthers|
|2005||New England Patriots||-0.60%||Y||Philadelphia Eagles|
|2006||Pittsburgh Steelers||16.30%||Y||Seattle Seahawks|
|2007||Indianapolis Colts||6.40%||Y||Chicago Bears|
|2008||New York Giants||-33.80%||N||New England Patriots|
|2009||Pittsburgh Steelers||18.80%||Y||Arizona Cardinals|
|2010||New Orleans Saints||11.00%||Y||Indianapolis Colts|
|2011||Green Bay Packers||5.50%||Y||Pittsburgh Steelers|
|2012||New York Giants||7.30%||Y||New England Patriots|
|2013||Baltimore Ravens||26.50%||Y||San Francisco 49ers|
More from MarketWatch
How about this pattern, 49ers have gone to the big game 5 times, the first 2 resulted in 19.60 and 27.00 rise, and the 3rd chance rendering -4.30, the next 2 apperances showed a 33.50 and a 26.50 last year, not only is the pattern been 2 good followed by one bad, also the 2nd and 3rd appearances were consecutive years as well as 5th and 6th will be. We don't want that GO HAWKS!
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