A Re-Examination of the Super Bowl Stock Market Predictor

Abstract

Krueger and Kennedy (1990) [KK] were the first to empirically document the remarkable stock market predictive power of the winner of the Super Bowl. The "model" predicts that the stock market would rise when the Super Bowl is won by a team from the old NFL, but would fall if the game was won by a member of the old AFL. This model correctly predicted the direction of five different market indices 20 times in the first 22 games (91% accuracy). An examination of the subsequent 24 games finds the model no longer possess abnormal predictive ability. When we examine the model’s returns earned after the winner of the Super Bowl is known, we find them reduced, especially in the period examined by KK. We also find the ability of the SBPM to predict the direction of subsequent change in the SP500 and the DJIA collapses to virtually zero since the publication of the KK article.

Keywords: Super Bowl, Stock Market, Prediction

JEL Classification: G14