Would a Panthers' Win Boost the Bull?

Sorry Patriots' fans -- history says the S&P 500-stock index rises when the NFC takes the Super Bowl. Investors shouldn't bet on it, however

By Frank Slusser

With the stock market regaining momentum after a brutal downturn, should investors root for the National Football Conference champion Carolina Panthers to maul the New England Patriots, the American Football Conference titleholder, in Super Bowl XXXVIII on Feb. 1 in Houston? Yes, according to the Super Bowl Theory, a fanciful equity-market predictor.

Invented by the late New York Times sportswriter Leonard Koppett, the theory combines two consuming American passions -- the stock market and football. The theory, which holds up 81% of the time (30 out of 37 years) when applied since Super Bowl I, says if the NFC team -- or an AFC team that was a member of the premerger 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.


  Like the resurgent Panthers, the theory has recently pulled out of a multiyear slump. In 2003, the S&P 500 rose 26.4% following the NFC Tampa Bay Buccaneers' 48-21 keelhauling of the Oakland Raiders in the Jan. 26 championship contest. Of course, a fourth-quarter gross domestic product surge of 8.2% and a recovery from pre-Iraq war jitters may deserve as much credit as the power of the theory.

In 2002, the AFC Patriots' 20-17 victory over the NFC's St. Louis Rams correctly dictated a down stock market -- 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 lost its mojo for a four-year stretch. In 2001, the 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. True, the economy was strong when the Rams won, 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.

The theory also ran off the tracks in 1999 and 1998. The S&P posted strong gains even though John Elway led the AFC's Denver Broncos to 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 giant 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%.

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 10 Super Bowls, and 6 of those victories coincided with economic slowdowns or recessions.

So, to borrow a gridiron expression, should equity investors "go long" (make a bullish bet using options) on the S&P 500 if the Panthers win? Or should they sack their stock holdings if the Patriots grab the prize? Let's reiterate: As a market predictor, the theory has a good record. But as an investing strategy, don't take it too seriously. The Super Bowl Theory is for amusement purposes only. So go ahead and cheer on the Pats -- or the Cats -- on Feb. 1. As always, we'll be pulling for the S&P 500.

Year Result Winning Conf. S&P 500 Perf. (%)
1967 Green Bay 35 Kansas City 10 NFL +20.1
1968 Green Bay 33 Oakland 14 NFL +7.7
1969 New York Jets 16 Baltimore 7 AFL -11.4
1970 Kansas City 23 Minnesota 7 AFL +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
2003 Tampa Bay 48 Oakland 21 NFC/Orig. NFL +26.4

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

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