NEW YORK – The stunning upset victory by the New England Patriots over the St. Louis Rams in Super Bowl XXXVI on Sunday may prove a bad omen for investors betting on a stock market recovery in 2002.
The win indicates a down year for stocks, at least according to the Super Bowl Stock Market Predictor, which has correctly forecast yearly stock performance based on the winner of the American professional football championship game 80 percent of the time.
The Predictor has had a rough run of late -- botching the stock market call for the past four years. But it is off to a strong start in 2002, unfortunately. For the month of January, the Dow fell 1.6 percent and the S&P 500 lost 1 percent.
The formula is simple. If a team with roots in the original National Football League (NFL) wins on Super Sunday, major stock market indices will rise in the calendar year the game is played. But if the champ can trace its roots to the American Football League (AFL), as the Patriots can, the Dow Jones industrial average and the Standard & Poor's 500 index will fall.
``You just have to plug in the winning score and take it from there,'' said Robert Stovall, market strategist at brokerage Prudential Securities Inc. and developer of the Predictor.
In 1970, the rival NFL and AFL merged. Within the merged league, most NFL teams were assigned to the National Football Conference (NFC) while AFL teams were placed in the American Football Conference (AFC). In the Super Bowl, the winners of each conference play each other.
The Predictor makes no forecast on the performance of the volatile Nasdaq composite index, which was not around when the Super Bowl was first played in 1967.
A year ago, football fans who are also investors faced a seemingly can't-miss situation, with both Super Bowl teams hailing from the original NFL, a scenario that had not happened in five years. But the stock market did not cooperate, with the Dow shedding 7.1 percent and the S&P 500 giving up 13 percent.
Before the current losing streak, the Predictor had never made incorrect calls in consecutive years, according to data provided by Stovall.
Despite the recent misses, the quirky indicator remains popular on Wall Street, where an 80 percent win ratio would be worth millions of dollars yearly in salary and bonus to market forecasters.
``With the AFL Patriots upsetting the NFL Rams last night, one can only hope that this facetious indicator remains broken,'' Credit Suisse First Boston U.S. strategist Tom Galvin said in a research report on Monday.
There is still hope for Wall Street bulls. The last time the Rams lost the Super Bowl, in 1980, the Dow rose 14.9 percent and the S&P 500 gained 25.8 percent during the year.