Are you ready for some football? Super Bowl XLVI (45) kicks-off with thousands of strobe like camera flashes and multi-million dollar commercials at 6:30 pm eastern this Sunday.
As an investor, should you care who wins? To paraphrase Bill Clinton, it depends on how you define investor – right? Whether it’s point spreads or option spreads, for the gambler and superstitious trader, the answer is emphatically yes!
According to oddsshark.com, “The historical returns in the Standard & Poors 500 index for the six months following the Super Bowl show a 7.77% return when the NFC wins. When an AFC team wins, the return is a sluggish -0.01%.”
Get that? If the NFC’s Giants win, hip, hip hooray, buy shares today. If the AFC’s Patriots win, ah man, stocks are going to suck. Go Giants – right?
Insert screeching halt sound – You did expect Top Equity News to dig deeper than that, didn’t you?
TEN looked back at the 6-month and year-end S&P track-record following a Giants’ or Patriots’ Super Bowl victory.
Both teams have won the championship game three times. TEN will start with the G-men.
Super Bowl XXI, January 25, 1987, the Giants pound the Denver Broncos 39-20. The Friday before the game, the S&P closed at 270.10. Six months later, the index was up 14% – we’ll take it. Unfortunately, a few months later, the crash of October ’87 shaved off 22% in a day! Ouch. By year’s end, the S&P finished down 8.5% following Super Bowl XXI.
Ottis Anderson won the MVP trophy in Super Bowl XXV. Helping the Giants defeat the Buffalo Bills, with a wide-right assist from Bills’ kicker Scott Norwood. While all of Buffalo slumped in disbelief, traders on Wall Street jumped for joy. Six months after Norwood’s slice, the S&P gained 13.9%. And it kept going from there; it closed out the year up 24.8%.
Fast forward to February 3rd, 2008, the New England Patriots’ dream of an undefeated season went down in flames thanks to the arm of the Giants’ Eli Manning, a guarantee made good by Plex, and a miraculous helmet catch by David Tyree. The S&P might rhyme with Tyree, but the index dropped the ball for investors. At the six month mile marker, stocks slid 9.7% and crashed 35.3% by New Year’s Eve.
The New England Patriots won their first Super Bowl, XXXVI, in 2002. That’s before Tom Brady was Tom Brady and marrying Brazilian supermodels. While Tom went on to become terrific, the market post-XXXVI was anything but. Six months later, the S&P lost 21.3%, and essentially remained unchanged at the finish line, down 21.4%.
Two years later, the Pats were the ones on the field when the confetti dropped after Super Bowl XXXVII; however, the first six months after the game weren’t worth celebrating for investors. The benchmark index shed 2.6%. From there, traders broke out the kazoos and balloons as the market gained 7.1% from the final whistle until the 2004 clock ticked down to double zeros.
2005 saw the gridironers from New England go back-to-back, and the S&P did the same in the next 6 months and year’s end, up 1.9% and 3.8% respectively. The returns were nothing that rolls your socks up and down, but safe enough to stay in the game.
Although performance history favors the NFC team, two of the three years the Giants won the Lombardi Trophy, stocks experienced some form of catastrophe; whereas, equities gained modestly for two of the Patriot’s three rings. TEN says let’s go Pats and lay the 2.5.
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