Many times you hear sports gambling compared to investing in the U.S. stock market.
It's basically all about informed speculation in both areas. If you are a bull market investor in the Dow Jones Industrial Average, then it could be wise to root for the Atlanta Falcons in Super Bowl LI on Feb. 5 against the New England Patriots.
The Super Bowl Predictor was invented/discovered in the 1970s by Wall Street analyst Robert H. Stovall, who freely admits that the Predictor has no scientific basis.
The theory holds that when a team from the original National Football League (now NFC) wins the Super Bowl, stocks will rise for the entire year (bull market). When a team from the former American Football League (AFC) wins, that’s bearish, meaning stocks fall.
Teams created since the merger count for their conference, NFC or AFC; so the Seattle Seahawks would now count in the NFC even though they played many years in the AFC. There is one exception: the Pittsburgh Steelers are in the AFC but also an original NFL team and thus counted as such for the Predictor. The stock market has gone up all six years the Steelers won the Super Bowl, so bear market investors everywhere were likely disappointed when Pittsburgh was routed by New England in the AFC Championship Game.
“There is no intellectual backing for this sort of thing,” Stovall said to the Wall Street Journal last year of the Predictor, “except that it works.”
Stovall has been the “custodian” of the Super Bowl Predictor since 1979. He wrote about it in a marketing piece for his then-employer, Dean Witter Reynolds. Stovall borrowed the idea from New York Times sportswriter Leonard Koppett.
The Super Bowl Predictor has been right 40 of 50 times, an 80 percent rate that no investor can match. It had correctly forecast the stock market for seven straight years until Super Bowl 50 when the AFC's Denver Broncos upset the NFC's Carolina Panthers. When the Patriots beat the Seahawks in the Super Bowl two years ago, the Dow Jones Industrial Average fell 2.2% for the year.
5Dimes offers a prop regarding the Predictor but only for the day after the Super Bowl, not the year: that the Dow is up after Super Bowl LI is -175 and down +135.