Bulls, Bears, and Pigskin Omens


By Frank Slusser Wall Street, blitzed the past three years by the tech-sector meltdown, boardroom scandals, and a flagging economy, should be cheering for the Tampa Bay Buccaneers to keelhaul the Oakland Raiders in the Super Bowl on Jan. 26. At least, that's if you go by the venerable Super Bowl Theory, which marks its 25th anniversary in 2003.

Invented by The New York Times sportswriter Leonard Koppett, the theory is a fanciful predictor that combines two consuming American passions -- the stock market and football. The theory, which holds up 78% of the time when applied since Super Bowl I, says if the National Football Conference team -- or an American Football Conference team that was a member of the pre-merger National Football League -- wins the game, the stock market, as measured by the S&P 500-stock index, will rise for the entire year. Conversely, if the AFC team wins, the market will go down in that year.

FIRST IN FIVE. Last year, the AFC New England Patriots' 20-17 victory over the NFC St. Louis Rams dictated a down stock market, and it was the first time the theory proved right in five years. The S&P 500 fell about 23.5% in 2002 as the U.S. remained mired in an economic slowdown, heightened by the continued fallout from the dot-com implosion and corporate accounting scandals.

Prior to the Patriots' dramatic, last-minute victory in Super Bowl XXXVI, the theory had a four-year rough patch. In 2001, the stock market lost ground, and the theory failed as the AFC Baltimore Ravens -- which has National Football League roots as the former Cleveland Browns -- beat the NFC New York Giants 34-7. The Baltimore team's victory came at the start of a year in which the economy headed into recession, the Fed cut rates to ease the pain, and the high-tech malaise that began the year before dragged on. Also, September 11 dealt the economy an unexpected blow.

The NFC St. Louis Rams' 23-16 victory over the AFC Tennessee Titans in January, 2000, should have been another bullish sign for the S&P index, yet it fell 10.1% for the year. The Rams won when the economy was strong, but the pace slowed later in the year as the high-tech bubble, which reached its peak in the first quarter, burst and produced a major downtrend, made worse by Fed credit tightening.

BUCKING BRONCOS. The theory suffered blows in 1999 and 1998. The S&P posted strong gains even though the AFC's Denver Broncos won the championship in both those years. In 1999, the economy picked up steam as the year progressed, inflation remained tame, Wall Street went crazy for dot-com IPOs, traditional equity valuations disappeared, and President Clinton was acquitted by the Senate. Denver's 1998 win kicked off a year in which the economy was still strong, but Asia became engulfed in a financial crisis and President Clinton's perjury in a sex scandal led to his impeachment. Also in that tumultuous year, Russia defaulted on its debt, and the Fed engineered a major rescue of hedge fund Long Term Capital Management.

Other exceptions: 1970, when the AFC Kansas City Chiefs won, and the S&P gained 0.1%; 1984, when the Raiders (then based in Los Angeles) won and the S&P rose 1.4%; 1990, when the NFC San Francisco 49ers won and the index lost 6.6%; and 1994, when the NFC Dallas Cowboys won and the market benchmark lost 1.53%. In total, the theory has worked 29 times in 36 years.

A few more stats of interest: When the NFC wins, the S&P on average gains 16.42%. When the AFC wins, the losses average 6.45%. Pure AFC teams (those that trace their origins to the old American Football League) have won only 9 of 35 games. Five of those victories coincided with economic slowdowns or recessions.

PUT OR CALL? So, should investors phone their brokers Jan. 27 to buy call options -- bets that the market will rise -- on the S&P 500 if the Buccaneers win? Or should they be looking for puts -- bets on a downturn -- if Al Davis & Co. walks off with the Lombardi trophy? Well, as a market predictor, the theory has had a pretty good run. But it would be ludicrous to rely on it as an investing strategy. The Super Bowl Theory is FOR AMUSEMENT PURPOSES ONLY.

Go ahead and cheer on the Bucs, or the "Silver and Black." As for us, we're rooting for the "500."

Year

Result

Winning Conf.

S&P 500 Perf. (%)

1967

Green Bay 35 Kansas City 10

NFC

+20.1

1968

Green Bay 33 Oakland 14

NFC/Orig. NFL

+7.7

1969

New York Jets 16 Baltimore 7

AFC

-11.4

1970

Kansas City 23 Minnesota 7

AFC

+0.1

1971

Baltimore 16 Dallas 13

NFC/Orig. NFL

+10.8

1972

Dallas 24 Miami 3

NFC/Orig. NFL

+15.7

1973

Miami 14 Washington 7

AFC

-17.4

1974

Miami 24 Minnesota 7

AFC

-29.7

1975

Pittsburgh 16 Minnesota 6

NFC/Orig. NFL

+31.5

1976

Pittsburgh 21 Dallas 17

NFC/Orig. NFL

+19.2

1977

Oakland 32 Minnesota 14

AFC

-11.5

1978

Dallas 27 Denver 10

NFC/Orig. NFL

+1.1

1979

Pittsburgh 35 Dallas 31

NFC/Orig. NFL

+12.3

1980

Pittsburgh 31 Los Angeles 19

NFC/Orig. NFL

+25.8

1979

Pittsburgh 35 Dallas 31

NFC/Orig. NFL

+12.3

1980

Pittsburgh 31 Los Angeles 19

NFC/Orig. NFL

+25.8

1981

Oakland 27 Philadelphia 10

AFC

-9.7

1982

San Francisco 26 Cincinnati 21

NFC/Orig. NFL

+14.8

1983

Washington 27 Miami 17

NFC/Orig. NFL

+17.3

1984

L.A. Raiders 38 Washington 9

AFC

+1.4

1985

San Francisco 38 Miami 16

NFC/Orig. NFL

+26.3

1986

Chicago 46 New England 10

NFC/Orig. NFL

+14.6

1987

N.Y. Giants 39 Denver 20

NFC/Orig. NFL

+2.0

1988

Washington 42 Denver 10

NFC/Orig. NFL

+12.4

1989

San Francisco 20 Cincinnati 16

NFC/Orig. NFL

+27.3

1990

San Francisco 55 Denver 10

NFC/Orig. NFL

-6.6

1991

N.Y. Giants 20 Buffalo 19

NFC/Orig. NFL

+26.3

1992

Washington 37 Buffalo 24

NFC/Orig. NFL

+4.5

1993

Dallas 52 Buffalo 17

NFC/Orig. NFL

+7.1

1994

Dallas 30 Buffalo 13

NFC/Orig. NFL

-1.5

1995

San Francisco 49 San Diego 26

NFC/Orig. NFL

+34.1

1996

Dallas 27 Pittsburgh 17

NFC/Orig. NFL

+20.3

1997

Green Bay 35 New England 21

NFC/Orig. NFL

+31.0

1998

Denver 31 Green Bay 24

AFC

+26.7

1999

Denver 34 Atlanta 19

AFC

+19.5

2000

St. Louis 23 Tennessee 16

NFC/Orig. NFL

-10.1

2001

Baltimore 34 N.Y. Giants 7

NFC/Orig. NFL

-13.0

2002

New England 20 St. Louis 17

AFC

-23.5

Slusser is a senior editor for Standard & Poor's MarketScope


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