With the National Football League down to four teams this weekend, the big question is not which teams will make to the Super Bowl but how those teams will impact the Super Bowl Stock Market Predictor. A year ago Washington and Lee’s George Kester, the Martel Professor of Finance in W&L’s Williams School of Commerce, Economics, and Politics, authored an academic study that reexamined data on the Super Bowl predictor. So what does this year hold? According to George’s figuring, there is reason for market watchers to root for the Pittsburgh Steelers Sunday in their American Conference Championship Game against the New York Jets. George’s work is cited again today on the Wall Street Journal.
Here’s his explanation for why a Steeler win means a bull market:
“It will be great for the stock market if the Steelers to win this weekend. Why? The Super Bowl Stock Market Predictor. According to this often-cited market predictor, whenever an original NFL team wins the Super Bowl, the stock market is up that year. Whenever an original AFL wins, the market is down. As of 2010, the overall prediction accuracy of the Super Bowl Stock Market Predictor was 77.3 percent.
“Here is where a Steelers victory this weekend becomes especially interesting and good for Wall Street. If the Steelers defeat the Jets, we will again have two original NFL teams playing in Super Bowl XLV. Regardless of which team ends up winning the Super Bowl, an up market will be predicted by the Super Bowl Stock Market Predictor.
“Thanks to the successes of the Steelers and Colts, both ‘original’ NFL teams that are now in the AFC, this has happened nine times in the 44 year history of the Super Bowl: 1971, 1975, 1976, 1979, 1980, 1996, 2007, 2009 and 2010. It gets even more interesting. In those nine years when two original NFL teams met each other on Super Sunday, the market (as measured by the S&P 500 Index) was up that year 100 percent of the time. Moreover, the average increase in the market was 17.71 percent, as compared to only 10.43 percent in the other 21 years when original NFL teams won. The market lost an average of 3.61 percent in the 12 years when original AFL teams won and gained an average of 6.67 percent in the two years expansion teams won.
“So, with apologies to New York Jets fans, go Steelers!”