Short the Denver Broncos
There are plenty of offbeat investment strategies out there, like betting on death and checking the market's horoscope. And every year toward the end of January, another supposed economic trend emerges: the Super Bowl Indicator.
So if you're bullish on stocks, some sports and financial writers tell you to hope for a Seattle Seahawks win. According to the SBI, the Dow Jones Industrial Average rises whenever the NFC team wins the Super Bowl, a fact that has been 80 percent accurate since 1967.
Of course, a trip back to eighth-grade statistics would remind us that correlation does not imply causation -- but who cares about that if you're looking for a reason to root for a team, other than regional alliances or Vegas lines, of course.
Be wary of staking your savings on the Super Bowl, however: When the SBI has failed, it's failed badly. The last year that happened, in 2008, the NFC's New York Giants won the Super Bowl, and the Dow dropped 33.8 percent. (Apparently the SBI doesn't include an adjustment for a global recession, but then again, this is America's Game.) And though the SBI has failed only nine out of the last 47 years, four of those games have involved the Denver Broncos.
So if you prefer living on the edge, go ahead and bet against the market on Peyton Manning, whose Broncos were listed as a 2.5-point favorite over the Seahawks on Wednesday. While you're at it, you might as well place an early wager on the New York Yankees winning the World Series, and not just because of their blockbuster signing of Masahiro Tanaka. A similarly dubious trend points to the Yankees' success in October when a Democrat occupies the White House, meaning New Yorkers of all political stripes must have been rooting for four more years in 2012, and should ignore last season's playoff miss as a simple statistical anomaly.
(Kavitha A. Davidson is a Bloomberg View columnist who writes about sports. Follow her on Twitter at @kavithadavidson.)