Will your 401(k) be bitten by the Bengals—or rally with the Rams?
That’s what adherents of the so-called Super Bowl Indicator[i] would likely conclude, after all. It’s a “theory” that when a team from the old National Football League wins the Super Bowl, the S&P 500 will rise, and when a team from the old American Football League prevails, stock prices will fall.
It’s a “theory” that has been found to be correct nearly 80% of the time—for 41 of the 55 Super Bowls, in fact. And sure enough, last year’s win by the NFC’s Tampa Bay Buccaneers provided support for that notion, as the S&P 500 gained ground.
Not that it hasn’t had its shortcomings. One need look back no further than the previous year’s win by the AFC’s (and original AFL) Kansas City Chiefs over the then-NFC Champion San Francisco 49ers to refute the applicability (or did your 401(k) miss that 18.4% rise in the S&P 500?). Or how about the year before that when the AFC’s New England Patriots (who once upon a time were the AFL’s Boston Patriots) bested the NFC champion Los Angeles Rams (who, of course, are making another run at it this year)—when the S&P 500 was up more than 30% in 2019.
Or, looking the other way, the year before that a win by the NFC champion Philadelphia Eagles against the AFC Champion Patriots turned out to be a loser, marketwise, with the S&P 500 down more than 6% (though for most of the year it was quite a different story). Ditto the year before, when the epic comeback by those same AFC Champion Patriots against the then-NFC champion Atlanta Falcons failed to forestall a 2017 market surge.
Now, one might think that the real “spoiler” to this market “theory” is the New England Patriots—but the year before that, the AFC’s (and original AFL) Broncos’ 24-10 victory over the Carolina Panthers, who represented the NFC, also proved to be an “exception.”
Market Makings
You might well wonder why, in view of that consistent string of “exceptions” that we’re still talking about this “theory”—but, as it turns out, that’s an unusual (albeit consistent) break in the streak that was sustained in 2015 following Super Bowl XLIX, when the AFC’s New England Patriots (yes, they show up a lot) bested the Seattle Seahawks 28-24 to earn their fourth Super Bowl title.
It also “worked” in 2014, when the Seahawks bumped off the legacy AFL Denver Broncos, and in 2013, when a dramatic fourth-quarter comeback rescued a victory by the Baltimore Ravens—who, though representing the AFC, are technically a legacy NFL team via their Cleveland Browns roots (this is where things start to get confusing, as the Ravens, who were the Browns moved to Baltimore in 1995 (though the NFL still views them as an expansion team) filling the hole left by the then-Baltimore Colts’ 1984 “dead of night” move to Indianapolis.
Admittedly, the fact that the markets fared well in 2013 was hardly a true test of the Super Bowl Theory since, as it turned out, both teams in Super Bowl XLVII—the Ravens and the San Francisco 49ers—were NFL legacy teams.
However, consider that in 2012 a team from the old NFL (the New York Giants) took on—and took down—one from the old AFL (the New England Patriots—yes, those New England Patriots… again). And, in fact, 2012 was a pretty good year for stocks.
Steel ‘Curtains’?
On the other hand, the year before that, the Pittsburgh Steelers (representing the American Football Conference) took on the National Football Conference’s Green Bay Packers—two teams that had some of the oldest, deepest and, yes, most “storied” NFL roots, with the Steelers formed in 1933 (as the Pittsburgh Pirates) and the Packers founded in 1919. According to the Super Bowl Theory, 2011 should have been a good year for stocks (because, regardless of who won, a legacy NFL team would prevail).
But as some may recall, while the Dow gained ground for the year, the S&P 500 was, well, flat (dare we say “deflated”?).
And then there was the string of Super Bowls where the contests were all between legacy NFL teams (thus, no matter who won, the markets should have risen):
- 2006, when the Steelers bested the Seattle Seahawks;
- 2007, when the Indianapolis Colts (those old Baltimore Colts) beat the Chicago Bears 29-17;
- 2009, when the Pittsburgh Steelers took on the Arizona Cardinals (who had once been the NFL’s St. Louis Cardinals); and
- 2010, when the New Orleans Saints bested the Indianapolis Colts, who, as we’ve already remarked, had roots dating back to the NFL legacy Baltimore Colts.
Sure enough, the markets were higher in each of those years.
As for 2008? Well, that was the year that the NFC’s New York Giants upended the hopes of the AFL-legacy Patriots (yes, those Patriots) for a perfect season, but it didn’t do any favors for the stock market. In fact, that was the last time that the Super Bowl Theory didn’t “work” (well, until the year before last—oh, and the year before that—and the year before…).
Patriot Gains
Times were better for Patriots fans in 2005, when they bested the NFC’s Philadelphia Eagles 24-21. Indeed, according to the Super Bowl Theory, the markets should have been down that year—but the S&P 500 rose 2.55%.
Of course, Super Bowl Theory proponents would tell you that the 2002 win by the New England Patriots accurately foretold the continuation of the bear market into a third year (at the time, the first accurate result in five years). But the Patriots’ 2004 Super Bowl win against the Carolina Panthers (the one that probably nobody except Patriots fans and disappointed Panthers advocates remember because it was overshadowed by the infamous “wardrobe malfunction”) failed to anticipate a fall rally that helped push the S&P 500 to a near 9% gain that year, sacking the indicator for another loss (couldn’t resist).
Bronco ‘Busters’
Consider also that, despite victories by the AFL-legacy Denver Broncos in 1998 and 1999, the S&P 500 continued its winning ways, while victories by the NFL-legacy St. Louis (by way of Los Angeles) Rams (that have since returned to the City of Angels) and the Baltimore Ravens (those former “Browns”) did nothing to dispel the bear markets of 2000 and 2001, respectively.
In fact, the Super Bowl Theory “worked” 28 times between 1967 and 1997, then went 0-4 between 1998 and 2001, only to get back on track from 2002 on (though “purists” still dispute how to interpret Tampa Bay’s 2003 victory, since the Buccaneers spent their first NFL season in the AFC before moving to the NFC).
Indeed, the Buccaneers’ move to the NFC was part of a swap with the Seattle Seahawks, who did, in fact, enter the NFL as an NFC team in 1976 but shuttled quickly over to the AFC (where they remained through 2001) before returning to the NFC.[ii] And, not having entered the league until 1976, regardless of when they began, can the Seahawks truly be considered a “legacy” NFL squad?
Bear in mind as well, that in 2006, when the Seahawks made their first Super Bowl appearance—and lost—the S&P 500 gained nearly 16%.
As for Sunday’s contest, it’s said to be a contest of underdogs—with oddsmakers thinking this was “supposed” to be a contest between the 49ers and the Titans (though the Rams were an early season favorite, and thus arguably after a bit of a stumble have redeemed themselves). In fact, this is the first time in Super Bowl history that both teams entered the playoffs as (only) No. 4 seeds.
The Bengals have appeared in three Super Bowls (counting this one), having lost the other two—in 1981 and 1988—both to the 49ers (and both by a single score). The Rams, on the other hand, are making their fifth Super Bowl appearance, and their second in the last four years. Their last appearance: in 2018 against the Patriots, in what turned out to be the lowest scoring Super Bowl of all time (13-3).
Rams coach Sean McVay, who is just 36, is not only looking for his first Super Bowl win, but if he gets it, he’ll be the youngest head coach to ever hoist the Lombardi Trophy (Steelers coach Mike Tomlin currently holds that distinction for winning Super Bowl XLIII at age 36). On the other hand, Bengals coach Zac Taylor is (just) 38—marking the youngest pair of Super Bowl head coaches in the game’s history.
A final point of potential interest: the Bengals (the designated home team, representing the AFC, even though the game is literally being played on the Rams’ home field) has announced that they will be wearing black jerseys and white pants with orange highlights and matching socks—in tribute to their first Super Bowl appearance (though they lost that game, of course). The Rams will be donning their retro white jersey, yellow sleeves and royal blue socks. That might matter because, dating back to 2005 with the Patriots in Super Bowl XXXIX, the team wearing white jerseys has won 14 of 17 times.[iii]
All in all, and particularly in view of the exciting playoff games that have led up to it, it looks like it should be a good game.
And that—whether you are a proponent of the Super Bowl Theory or not—would be one in which regardless of which team wins, we all do!
- Nevin E. Adams, JD
[i] An alternate theory linking the Super Bowl to stock market performance in reverse fashion postulates that Wall Street’s results can be used to predict the outcome of the game. According to this theory, if the Dow rises from the end of November until Super Bowl game day, the team whose full name appears later in the alphabet will win.
[ii] Note: Seattle is the only team to have played in both the AFC and NFC Championship Games, having relocated from the AFC to the NFC during league realignment prior to the 2002 season. The Seahawks are the only NFL team to switch conferences twice in the post-merger era. The franchise began play in 1976 in the NFC West division but switched conferences with the Buccaneers after one season and joined the AFC West.
[iii] Only the Packers in 2010, Eagles in 2017 and Chiefs in 2020 went against this trend.
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