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Super Bowl Indicator Says 2002 Will Be Bearish
by Charles B. Carlson, CFA
Dow Theory Forecasts

While it makes absolutely no sense whatsoever, buying stocks when an NFC team wins the Super Bowl and selling stocks when an AFC team wins would have made you a pile of money.

Look at the numbers. The Dow has risen for the year 22 of the 25 times when the National Football Conference (NFC) has won the game (or when the winner is an AFC team from the pre-merger NFL, like the Steelers or Colts). The Dow has fallen 7 out the 10 years the American Football Conference (AFC) has won.

So what does the win by the New England Patriots mean for the market? Simple. According to the Super Bowl indicator, 2002 will be a down year since an AFC team won.

Now, would I make a market bet solely on this indicator? Of course not. Correlation isn't the same as cause and effect.

This is a key point to remember. Market pundits make market calls all of the time that have more to do with coincidence than cause and effect. Investors need to be aware that, ultimately, the only factors that drive stock prices over time are corporate profits, inflation, and interest rates.

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