By Peter Dizikes
http://abcnews.go.com/sections/business/DailyNews/superbowl_dowjones020201.html
N E W Y O R K, Feb. 1 — The St. Louis Rams play the New England Patriots in the Super Bowl. The Bulls and Bears continue to battle on Wall Street. What's the connection?
Well, at least one person thinks the result of Super Bowl XXXVI could tell you all you need to know about the stock market for the rest of 2002. That would be Professor Thomas Kreuger of the University of Wisconin-LaCrosse, co-author of a survey showing a strong correlation between the outcome of the Super Bowl and the direction of the Dow Jones Industrial Average, the world's best-known stock index. Indeed, Kreuger lets the Super Bowl guide his investment strategy.
The indicator shows that when the winner comes from the National Football Conference (or is an AFC team from the pre-merger NFL, like the Steelers or Colts), the Dow Jones Industrial Average tends to rise during the year as a whole. To date, that has happened 22 of 25 times. But when the American Football Conference team wins, the Dow has fallen 7 of 10 years.
Accounts vary about who first noticed the correlation; Krueger first published his survey, along with Professor William Kennedy of the University of North Carolina at Charlotte, in 1990.
All told, though, the game has forecast the Dow's direction 29 of 35 years, or 83 percent of the time. Kreuger says that an indicator like that, no matter how apparently whimsical, is too telling to ignore.
"The numbers don't lie," says Kreuger, a Green Bay Packers fan. "There must be some sort of relevance."
A win by the NFC's St. Louis, a heavy favorite, would seem to augur well for investors in 2002. But would Kreuger really venture into the markets based on the outcome of a football game?
"Let's assume the Rams win," says Kreuger. "I honestly have money sitting in cash accounts ready to invest on Monday."
Standing on the Sidelines
Kennedy, on the other hand, says that while he used to invest based on the Super Bowl, he no longer treats the correlation as a significant barometer.
"The thing has been wrong three out of the last four years, and that blew my confidence," says Kennedy, a Carolina Panthers season-ticket holder. "I'm kind of skeptical now."
Of course, there are other reasons to think the apparent connection is not meaningful. For starters, one could argue the whole thing is simply a coincidence based on a small statistical sample.
The historic bull market of the 1980s and 1990s, after all, fell at the same time as an equally historic period of dominance for the NFC, which won thirteen straight Super Bowls from January 1985 through January 1997, behind the powerful repeat champions like the San Francisco 49ers, Washington Redskins and Dallas Cowboys.
And as Krueger himself acknowledges, the Dow Jones rises on an annual basis more frequently than it falls. Find any non-financial phenomenon where one outcome happens more than half the time, and you can talk yourself into thinking you have a significant indicator on your hands.
'You Can't Even Spell Dow Jones'
An additional warning to investors: the indicator does not guarantee that each of the 30 stocks in the Dow will go up, even if the index as a whole rises. And since the Dow's stocks have changed through over the years, in an attempt to keep the index current, even those intrigued by Krueger's correlation might be hard-pressed to name the Dow's components.
Or, as Baltimore Ravens tight end Shannon Sharpe said to New York Giants defensive back Jason Sehorn in a recent commercial for Charles Schwab that, fortuitously, was airing well before their teams squared off in last year's game: "You can't even spell Dow Jones."
So if your knowledge of the leading stocks is shaky, you might want to think twice before investing should the Rams, a two-touchdown favorite, blow the Patriots away.
Despite all that, Kreuger remains buoyant about the indicator: "I'm confident the Rams will win, and I'm fairly confident the market will recover."
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