Since the first stocks traded on Wall Street, investors have been trying to predict which way they will go and when these shifts will happen.
The Super Bowl Indicator
Were you rooting for the Seattle Seahawks this Super Bowl because you’re a fan, or because you were hoping for another good year in the stock market? The “Super Bowl indicator” originated in 1978 by New York Times sportswriter Leonard Koppett. He predicted that if a pre-merger NFL team won the Super Bowl, then the Dow Jones Industrial Average (DJIA) would end the year higher, and if an old AFL team won, then stocks would be on the losing side.
While there are those who stick to the original pre-merger NFL/AFL teams and factor in newcomers, such as Seattle, which didn’t exist in 1978, it’s less confusing to simply make the distinction down NFC – AFC lines. So how accurate is the “Super Bowl indicator?” It has predicted the direction of the market in 39 out of 48 years, or 81 percent of the time. The Patriots recent Super Bowl win would indicate trouble for the stock market in 2015, as they were one of the original AFL teams and are now part of the AFC.
(AP Photo)
AP Photo
The Hemline Index
This theory came on the scene in the 1920s when George Taylor, a Wharton School professor, equated the length of women’s hemlines with the health of the economy. His theory suggested that when the economy was going gangbusters, women would raise their hemlines to show off their silk stockings, a luxury that more could afford during flush times. When the economy was tough and money was tight, hemlines would drop to hide their bare legs.
While the popularity of the miniskirt in the 1960s did coincide with a stock market boom, the lack of a clear hemline direction may cause confusion for both the fashion-forward and those who rely on this theory before investing. Take these two conflicting headlines from 2012 New York Fashion Week: “Hemlines are plunging, is the economy next?” and “Skirts are getting shorter and that’s bullish for the economy.”
So who got it right? While the S&P 500 gained 13 percent in 2012, unemployment was still at 7.9 percent and the drop in government spending ahead of sequestration put a damper on the economy. I’d say it was a tie.
(Photo by Gareth Cattermole/Getty Images)
Photo by Gareth Cattermole/Getty Images
The Skyscraper Curse
If you build it, will the stock market crash? The data seems to suggest that aside from bragging rights, the prize for erecting the world’s tallest building is a tanking stock market. In 1929, construction was about to begin on the Empire State Building — and the Chrysler building in Chicago was already underway — when the stock market crashed and ushered in the Great Depression.
In 1974, Chicago was the scene of the tallest building, again, with the opening of the Sears Tower, which happened to coincide with 1974-75 stock market crash. In 1997, the Petronas Towers, located in Kuala Lampur, Malaysia, opened amid the Asian Financial Crisis. Once again, the stock market plunged in 2008, ushering in the Great Recession, as construction was underway on the Burj Khalifa in Dubai. When will the next crash occur? No one can know for sure, but Saudi Arabia is the next to build the world’s tallest skyscraper scheduled to open in 2019.
(AP Photo)
AP Photo
The Sports Illustrated Swimsuit Issue Indicator
No list of bizarre stock market indicators is complete without including the highly anticipated appearance of scantily clad women on the cover of a men’s sports magazine. So here goes. If the model on the cover of Sport’s Illustrated is American, then the theory suggests that the S&P 500 will perform better than years when a non-American is on the cover.
There is some data to substantiate this claim. According to Bespoke, from 1978 to 2013 an American appeared on the cover 18 times. During those years, the S&P 500 was positive 88 percent of the time with an average return of 14.3 percent. When a non-American graced the cover, the S&P 500 was positive 76.5 percent of the time with an average return of 10.8 percent. Since Hannah Davis, this year’s cover model is from the U.S. Virgin Islands, odds are in our favor again this year.
Relying on the length of hemlines or Super Bowl winners to decide how to invest your savings may be too crazy, but I would like to offer one piece of advice: Get yourself a rabbit’s foot for good luck. It’s still Friday the 13th.
(Photo by Rick Diamond/Getty Images for Sports Illustrated)
Photo by Rick Diamond/Getty Images for Sports Illustrated
