Ivars Peterson
The win by the Pittsburgh Steelers in this year's Super Bowl could mean that the stock market is heading upward. At least, that's what the Super Bowl investment indicator suggests.
The theory is that a Super Bowl win by a team from the original National Football League (now the NFL's NFC division) means that the stock market will be up for the coming year. A win by a team from the old American Football League (now the NFL's AFC division) foretells a decline.
Several years ago, economist Paul M. Sommers of Middlebury College analyzed the data and found that his model supported the notion that the stock market, as measured by the Dow Jones Industrial Average, posts a significantly higher annual gain if the Super Bowl winner is from the National Football Conference (the Western Division, in particular). Moreover, the higher the combined team point totals are, the lower is the percentage change in the Dow Jones Industrial Average. See "Super Bowls and Stock Markets" at http://www.sciencenews.org/articles/20000701/mathtrek.asp.
However, the model also pointed to a precipitous decline in the Super Bowl theory's predictive power in recent years. Until about a decade ago, the theory's success rate was more than 80 percent. Since then, the success rate has dropped to less than 50 percent.
According to Sommers, the victory by the Denver Broncos in 1998, for example, suggested that the percentage change in the Dow Jones Industrial Average would be –20.85 percent. In fact, the Dow closed out the year up 20.61 percent.
Denver's 1999 victory also failed as a market predictor, as did the subsequent victories by the St. Louis Rams in 2000 and the Baltimore Ravens in 2001, which pointed to market upturns. Because it was originally based in Cleveland, Baltimore can be counted as one of the original NFL teams, even though it is now in the AFC.
full at http://www.sciencenews.org/articles/20060211/mathtrek.asp