Super Bowl 'Predicts' Market Again

January 6, 2006
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GRAND RAPIDS — Investors may want to pay more attention to Brush Street than Wall Street in a few weeks because a longstanding trend resurfaced last year.

Why Brush Street? Because that is the home of Detroit’s Ford Field, the site of next month’s Super Bowl, and the big game has a lengthy track record of “predicting” how the equity market will perform each year.

The Dow Jones Industrial Average slipped by 0.6 percent in 2005, after the New England Patriots beat the Philadelphia Eagles in Super Bowl XXXIX last February. Tradition holds that if an old AFL franchise wins the game, the Dow falls that year. New England entered the AFL as the Boston Patriots. The Pats won and the Dow fell.

In 2004, that didn’t happen, though, as the Dow rose by just over 3 percent even with the Patriots winning the second of their three recent Super Bowl titles that year.

But, overall, the Super Bowl outcome has indicated the direction of the Dow in 27 of the 32 games that an old AFL franchise has played in, for a success rate of 84 percent since 1967.

The game has been wrong about the Dow’s direction four times since 1990. Before then, 17 of 18 Super Bowls correctly predicted the Dow’s direction. A former AFL franchise has not played in just seven of the 39 games.

In the dozen Super Bowls that old AFL teams have won, the Dow fell eight times, for a 66 percent success rate. Of the 20 games that former AFL franchises lost, the Dow rose in 18 of those years for a 90 percent success rate — which last happened in 2003 when Tampa Bay drubbed Oakland, an AFL charter member, and the Dow soared by 20 percent.

As for 2005, the Dow began the year at 10,783 and ended it at 10,717 — falling more than 200 points in December. The Dow hit its lowest point of 10,012 on April 17 and reached its high-water mark of 10,931 on Nov. 25.

Super Bowl XL will be played on Feb. 5 at Ford Field, which is located at 2000 Brush St. in downtown Detroit. So with Chicago in the playoffs, investors just might find themselves rooting for the Bears to produce a bull market.    

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