As one of the fans of CNBC resident Eagles, I was appalled at opening my inbox earlier this week and finding an email chain that includes the subject “Why the Bulls hate birds?”
What was circulating among my colleagues was data from Ryan Detrick, the Chief Market Strategist at the Carson Group. He noted that the Philadelphia Super Bowl and World Series victory was historically consistent with stock market misfortunes.
The stock market crash in 1929? That same year, Philadelphia Athletics won the World Series. 2018 was the worst year for stocks since 2008 when the Eagles won their first Super Bowl.
“Who should we take root? Personally, neither team can stand it, but I think it’s just that when Philadelphia wins the Super Bowl or the World Series, there’s a tendency to happen really bad things.” A scary chart.
See, I don’t expect anyone to side with Philadelphia fans. I have a Jason Kelse t-shirt saying, “No one likes us. We don’t care.” I get it, we’re uncomfortable.
But if you support this mayor, it shouldn’t be because you’re afraid of resigning your portfolio. After all, this bit about Philadelphia’s sports victory and stock market slides is the latest in the long stock “metrics” that market experts are thrown out there to entertain them there.
Beware of “fun” market metrics
What really drives the economy and stock market movements – corporate revenue, consumer sentiment, interest rates – can dry out. And we write about these things, we like to occasionally spice up it with fun little nuggets from stock market history.
Certainly, you can pay attention to what the Federal Reserve is doing. But what if we could find out what happens in other ways?
It photographs the so-called hemline indicator. This says skirt styles tend to be shorter during the upmarket (think of having a booming 20s and 80s). In that trend, the event to pay attention to this weekend is not the Super Bowl, but the New York Fashion Week.
Or, if you believe in the January barometer, you can ignore it all. The truth about this market suggests that the results of the stock market calendar year tend to follow what the stock did in January. That’s good news for the year. The S&P 500 rose about 3% in the first month of the year.
However, historical correlations are supported by the fact that the market is historically moving upward. Stocks generate 71% of calendar year revenue since 1945, including 14 of the 29 times that fell in January.
One of the stories associated with these metrics will remind you. Past performance does not guarantee future results. Even if any of these metrics were reliable predictors of past stock market movements (they were not), no one knows where future investments are heading .
And even if you believe in this kind of thing, the evidence for Philadelphia sports is thinner than it looks. Certainly the Phillies won the title in 2008. It was a famous bad year for stocks. The bare market, which is associated with the global financial crisis, began in 2007, and the World Series became famous in October.
Bear Market from 2007-2009 ended less than six months after the Phillies won.
Also, why only the World Series and the Super Bowl? The 1983 Sixers title should not be considered. How about 1975? The year the Flyers rolled its second Stanley Cup, the market rose 32% (who counts after a 30% decline).
Furthermore, as Detrick points out, the classic Super Bowl indicator shows that the market tends to support winners from the NFC over AFC. It would prefer the Eagles, but the last two years following the Chiefs title have been pretty spectacular for investors.
So, what is the neutral fan to make all of this? Detrick will tell you first: nothing. The portfolio does not move based on the length of the dress or who wins a sporting event. So feel free to choose your team based on uniform colours, the charm of a quarterback, or your feelings towards Taylor Swift.
Simply put, if there’s a market tank, the Eagles lifted the Lombardi Trophy on Sunday. So say with me: go to birds.
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