What the Super Bowl says
about Asia's stocks |
| |  | | | Kim Iskyan
Publisher,
Stansberry Pacific Research | | Last Sunday was the biggest (unofficial) holiday of the year in the United States, as just under 100 million people tuned in to the Super Bowl, the American football championship. They watched the New England Patriots (from the U.S. state of Massachusetts) beat the Los Angeles Rams (from California).
Of course, the Super Bowl has nothing to do with stock markets. But there's been an unusual correlation between winners and stock market movements... like the "January barometer" and the Winter Olympics. |
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The Super Bowl Indicator
This is where the "Super Bowl Indicator" comes into play.
Professional American football is divided into two conferences, the NFC (National Football Conference) and the AFC (American Football Conference). The Super Bowl is played between the winners of these two conferences.
Since the first Super Bowl in 1967, when an AFC team (represented this year by the winning New England Patriots) has won the big game, the U.S. stock market has returned an average of 9 percent for the year. That's slightly worse than the S&P 500's average return of 11 percent over the period. When the NFC team has won, the market has posted an average return of 13.1 percent. So it might be bad news for U.S. stocks this year, if you believe in the Super Bowl Indicator, because the team from the AFC won. |
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Great for stocks in Asia
However, when looking at Asian stocks, the results are strikingly reversed - with an even bigger swing towards higher returns when an AFC team wins. In the years when the AFC won, the MSCI Asia ex Japan index returned 21 percent (in U.S. dollar terms). That's far better than the 6.3 percent in years that the NFC team won the Super Bowl, and the 12.5 percent average annual return over the period. Why?
There's no scientific basis for the Super Bowl Indicator. And there's also no basis for the January barometer... and a lot of other coincidental indicators like this. Why would stock markets in Asia tend to perform better when the AFC wins the Super Bowl? There's no good reason.
Of course, in investing (and in much of life, for that matter) the past has no bearing on the present. But historical indicators like this give at least a bit of reason for optimism for Asian stocks in 2019.
Good investing,
Kim Iskyan
Publisher, Stansberry Pacific Research |
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| Kim Iskyan is the publisher of Stansberry Pacific Research. He has lived and worked in ten countries including Spain, Russia, Sri Lanka and the United States. Along the way, he's learned something about how markets work... and what matters (and doesn't matter) in the world of investing. Kim has been a stock analyst and research director for a big emerging market investment bank, managed a hedge fund, and sold mutual funds to private bankers. He's also advised Fortune 50 companies on political risk and helped build stock exchanges from scratch in countries that few people could find on a map. |
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