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02/04/2011

SB XLV

The Super Bowl and the Market
[Our annual look at the topic]

Super Bowl Quiz:

What was the cost of the top ticket to the first three Super Bowls? Answer below.

---

In the early 1960s, a scientist by the name of Norman Stingley, working for the Bettis Rubber Co. of Whittier, California, came up with a compound that he called Zectron. Zectron’s main property was that it had about six times the bounce of ordinary rubber.

The folks at Bettis saw no use for it so they gave the rights to Stingley who then took his product to Wham-O Company, the same folks who made a fortune on the Hula Hoop and the Frisbee. The Super Ball, as it was quickly labeled, was released in 1965 and over the course of the decade some 20 million were sold. And wouldn’t you know it, but the Super Ball ended up becoming the idea for the term “Super Bowl.”

The first four contests between the NFL and the AFL were labeled the “World Championship Game,” but in the beginning the owners were sitting around trying to come up with a snappier name when the late Lamar Hunt, the guiding light of the American Football League and the owner of the AFL’s Kansas City Chiefs, remembered watching his daughter play with a high-bouncing Super Ball and ‘ball’ morphed into ‘bowl.’ Voila. Super Bowl!

To be totally accurate, though, while Lamar Hunt first came up with the term, he sent a letter to NFL Commissioner Pete Rozelle, six months before the first event, wherein he wrote, “If possible, I believe we should ‘coin a phrase’ for the Championship Game. I have kiddingly called it the ‘Super Bowl,’ which obviously can be improved upon.’” It proved to be too late, however, when it came to the media which was already using the other term. [Source: “America’s Game,” by Michael MacCambridge]

Anyway, when it comes to the Super Bowl and the stock market, until the past 11 years the adage had been that if a team from the old NFL won the contest (including AFC entries like the Pittsburgh Steelers, a former NFL team before the merger of the two leagues), then the stock market would rise. But Denver’s two victories in 1998 and 1999 sort of damaged this theory (it being a traditional AFC squad), as stocks rose 20%+ each year thereafter as well.

---

Following are the results and the total return of the S&P 500*

1966 No game… -10.1%

1967 Green Bay 35 Kansas City 10… +24.0%

1968 Green Bay 33 Oakland 14… +11.1%

1969 New York Jets 16 Baltimore 7… -8.5%

1970 Kansas City 23 Minnesota 7… +4.0%

1971 Baltimore 16 Dallas 13… +14.3%

1972 Dallas 24 Miami 3… +19.0%

1973 Miami 14 Washington 7… -14.7%

1974 Miami 24 Minnesota 7… -26.5%

1975 Pittsburgh 16 Minnesota 6… +37.2%

1976 Pittsburgh 21 Dallas 17… +23.8%

1977 Oakland 32 Minnesota 14… -7.2%

1978 Dallas 27 Denver 10… +6.6%

1979 Pittsburgh 35 Dallas 31… +18.4%

1980 Pittsburgh 31 L.A. Rams 19… +32.4%

1981 Oakland 27 Philadelphia 10… -4.9%

1982 San Francisco 26 Cincinnati 21… +21.4%

1983 Washington 27 Miami 17… +22.5%

1984 L.A. Raiders 38 Washington 9… +6.3%

1985 San Francisco 38 Miami 16… +32.2%

1986 Chicago 46 New England 10… +18.5%

1987 N.Y. Giants 39 Denver 20… +5.2%

1988 Washington 42 Denver 10… +16.8%

1989 San Francisco 20 Cincinnati 16… +31.5%

1990 San Francisco 55 Denver 10… -3.2%

1991 N.Y. Giants 20 Buffalo 19… +30.6%

1992 Washington 37 Buffalo 24… +7.7%

1993 Dallas 52 Buffalo 17… +10.0%

1994 Dallas 30 Buffalo 13… +1.3%

1995 San Francisco 49 San Diego 26… +37.4%

1996 Dallas 27 Pittsburgh 17… +23.1%

1997 Green Bay 35 New England 21… +33.4%

1998 Denver 31 Green Bay 24… +28.6%

1999 Denver 34 Atlanta 19… +21.0%

2000 St. Louis 23 Tennessee 16… -9.1%

2001 Baltimore 34 N.Y. Giants 7… -11.9%

2002 New England 20 St. Louis 17… -22.1%

2003 Tampa Bay 48 Oakland 21… +28.7%

2004 New England 32 Carolina 29… +10.9%

2005 New England 24 Philadelphia 21... +4.9%

2006 Pittsburgh 21 Seattle 10… +15.8%

2007 Indianapolis 29 Chicago 17… +5.5%

2008 New York Giants 17 New England 14… -37.0%

2009 Pittsburgh 27 Arizona 23… +26.5%

2010 New Orleans 31 Indianapolis 17… +15.1%

*Return includes dividends.

And now your “exclusive” conclusions from the editor.

Playing off the popular “over / under” bets that many find so compelling, check this out.

In each of the 10 years that the S&P 500 finished down, the loser of the Super Bowl scored fewer than 20 points (17 or less, specifically), while in each of the 11 years in which the loser scored more than 20 points, the market finished up.

So, this is where investors should be focusing. Loser over 20, market is guaranteed to rise. Loser under 20, odds are 30% the market will finish lower (10 down years in the 33 in which the loser scored less than 20), or obviously a 70% chance it rises.

Of course this is all ridiculous, but it’s the one time each year I have the opportunity to be so.

But wait, there’s more.

We now know that if the Steelers win, the market goes on to post double-digit gains, as 2009 proved for a sixth time. [Or even when they lose.]  Ditto Green Bay for its four appearances (3 wins, 1 loss).

And get this exclusive finding. The market has never finished down in a year when a West Coast team has lost, which happens to be five times, including 1995 when two played each other; San Francisco defeating San Diego. You can look it up.

Finally, as always; bet with your head, not over it.

[Note: I mentioned my proprietary ‘over / under’ formula for the first time in 2004 and the results since continue to bear it out.]

Sources:

Ibbotson Associates
“Toys!” Don Wulffson

Quiz Answer:

The top ticket price for the first three Super Bowls was $12. [For the next three it went to just $15.] Today that same stub has surpassed $1,000 (far higher if purchased through a ticket broker). 

Wall Street History returns in two weeks.

Brian Trumbore

 
 



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-02/04/2011-      
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Wall Street History

02/04/2011

SB XLV

The Super Bowl and the Market
[Our annual look at the topic]

Super Bowl Quiz:

What was the cost of the top ticket to the first three Super Bowls? Answer below.

---

In the early 1960s, a scientist by the name of Norman Stingley, working for the Bettis Rubber Co. of Whittier, California, came up with a compound that he called Zectron. Zectron’s main property was that it had about six times the bounce of ordinary rubber.

The folks at Bettis saw no use for it so they gave the rights to Stingley who then took his product to Wham-O Company, the same folks who made a fortune on the Hula Hoop and the Frisbee. The Super Ball, as it was quickly labeled, was released in 1965 and over the course of the decade some 20 million were sold. And wouldn’t you know it, but the Super Ball ended up becoming the idea for the term “Super Bowl.”

The first four contests between the NFL and the AFL were labeled the “World Championship Game,” but in the beginning the owners were sitting around trying to come up with a snappier name when the late Lamar Hunt, the guiding light of the American Football League and the owner of the AFL’s Kansas City Chiefs, remembered watching his daughter play with a high-bouncing Super Ball and ‘ball’ morphed into ‘bowl.’ Voila. Super Bowl!

To be totally accurate, though, while Lamar Hunt first came up with the term, he sent a letter to NFL Commissioner Pete Rozelle, six months before the first event, wherein he wrote, “If possible, I believe we should ‘coin a phrase’ for the Championship Game. I have kiddingly called it the ‘Super Bowl,’ which obviously can be improved upon.’” It proved to be too late, however, when it came to the media which was already using the other term. [Source: “America’s Game,” by Michael MacCambridge]

Anyway, when it comes to the Super Bowl and the stock market, until the past 11 years the adage had been that if a team from the old NFL won the contest (including AFC entries like the Pittsburgh Steelers, a former NFL team before the merger of the two leagues), then the stock market would rise. But Denver’s two victories in 1998 and 1999 sort of damaged this theory (it being a traditional AFC squad), as stocks rose 20%+ each year thereafter as well.

---

Following are the results and the total return of the S&P 500*

1966 No game… -10.1%

1967 Green Bay 35 Kansas City 10… +24.0%

1968 Green Bay 33 Oakland 14… +11.1%

1969 New York Jets 16 Baltimore 7… -8.5%

1970 Kansas City 23 Minnesota 7… +4.0%

1971 Baltimore 16 Dallas 13… +14.3%

1972 Dallas 24 Miami 3… +19.0%

1973 Miami 14 Washington 7… -14.7%

1974 Miami 24 Minnesota 7… -26.5%

1975 Pittsburgh 16 Minnesota 6… +37.2%

1976 Pittsburgh 21 Dallas 17… +23.8%

1977 Oakland 32 Minnesota 14… -7.2%

1978 Dallas 27 Denver 10… +6.6%

1979 Pittsburgh 35 Dallas 31… +18.4%

1980 Pittsburgh 31 L.A. Rams 19… +32.4%

1981 Oakland 27 Philadelphia 10… -4.9%

1982 San Francisco 26 Cincinnati 21… +21.4%

1983 Washington 27 Miami 17… +22.5%

1984 L.A. Raiders 38 Washington 9… +6.3%

1985 San Francisco 38 Miami 16… +32.2%

1986 Chicago 46 New England 10… +18.5%

1987 N.Y. Giants 39 Denver 20… +5.2%

1988 Washington 42 Denver 10… +16.8%

1989 San Francisco 20 Cincinnati 16… +31.5%

1990 San Francisco 55 Denver 10… -3.2%

1991 N.Y. Giants 20 Buffalo 19… +30.6%

1992 Washington 37 Buffalo 24… +7.7%

1993 Dallas 52 Buffalo 17… +10.0%

1994 Dallas 30 Buffalo 13… +1.3%

1995 San Francisco 49 San Diego 26… +37.4%

1996 Dallas 27 Pittsburgh 17… +23.1%

1997 Green Bay 35 New England 21… +33.4%

1998 Denver 31 Green Bay 24… +28.6%

1999 Denver 34 Atlanta 19… +21.0%

2000 St. Louis 23 Tennessee 16… -9.1%

2001 Baltimore 34 N.Y. Giants 7… -11.9%

2002 New England 20 St. Louis 17… -22.1%

2003 Tampa Bay 48 Oakland 21… +28.7%

2004 New England 32 Carolina 29… +10.9%

2005 New England 24 Philadelphia 21... +4.9%

2006 Pittsburgh 21 Seattle 10… +15.8%

2007 Indianapolis 29 Chicago 17… +5.5%

2008 New York Giants 17 New England 14… -37.0%

2009 Pittsburgh 27 Arizona 23… +26.5%

2010 New Orleans 31 Indianapolis 17… +15.1%

*Return includes dividends.

And now your “exclusive” conclusions from the editor.

Playing off the popular “over / under” bets that many find so compelling, check this out.

In each of the 10 years that the S&P 500 finished down, the loser of the Super Bowl scored fewer than 20 points (17 or less, specifically), while in each of the 11 years in which the loser scored more than 20 points, the market finished up.

So, this is where investors should be focusing. Loser over 20, market is guaranteed to rise. Loser under 20, odds are 30% the market will finish lower (10 down years in the 33 in which the loser scored less than 20), or obviously a 70% chance it rises.

Of course this is all ridiculous, but it’s the one time each year I have the opportunity to be so.

But wait, there’s more.

We now know that if the Steelers win, the market goes on to post double-digit gains, as 2009 proved for a sixth time. [Or even when they lose.]  Ditto Green Bay for its four appearances (3 wins, 1 loss).

And get this exclusive finding. The market has never finished down in a year when a West Coast team has lost, which happens to be five times, including 1995 when two played each other; San Francisco defeating San Diego. You can look it up.

Finally, as always; bet with your head, not over it.

[Note: I mentioned my proprietary ‘over / under’ formula for the first time in 2004 and the results since continue to bear it out.]

Sources:

Ibbotson Associates
“Toys!” Don Wulffson

Quiz Answer:

The top ticket price for the first three Super Bowls was $12. [For the next three it went to just $15.] Today that same stub has surpassed $1,000 (far higher if purchased through a ticket broker). 

Wall Street History returns in two weeks.

Brian Trumbore