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Place Your Bets: Super Bowl Odds and the Market


No matter which team wins, the market outlook is strong.

Who cares what the oddsmakers at the Venetian (LVS), the Wynn (WYNN), or the Bellagio (MGM) say about the Super Bowl?

The Colts may be favored in Vegas, but, according to Richard Peterson, director of credits, markets, and risk for Standard & Poor's and Capital IQ analyst Kevin Kelly, a Colts or Saints victory might mean stock market success for the entire year.

To begin with, investors should be pleased that the game is being played in Miami, which has hosted the Super Bowl more times than any other city. During those years, the average market return was 17%. More broadly, Super Bowls played in Florida are correlated with an average S&P 500 return of 15%.

Investors should also take heart that the game will be held at Sun Life (SLF) Stadium, which has no dome. Of the 30 Super Bowls that have been played at open-air stadiums, the average S&P 500 return for those years has been 15%. Eleven Super Bowls have been played in domed stadiums -- when the average market returns for those years has been 6%.

Now, let's get down to brass tacks.


A Colts win could deliver double-digit gains in 2010. Peterson and Kelly calculated annualized average S&P 500 returns from 1967 through 2009 and discovered that wins by the Colts are directly correlated with an average 10% stock market return.

In addition, the years in which the Super Bowl has been won by a three-time champion have seen, on average, 17% annualized S&P 500 returns. The Colts have won two Super Bowls and are vying for their third on Sunday.

The Colts are the "home team." During 18 of the past 43 years, when the home team has won the Super Bowl, the average S&P 500 return was 18%, compared to an average of 6% in the 18 years in which the visiting team won.


The Saints have not been to the Super Bowl before. The average market return for a year in which a NFC team wins on its first appearance in the Super Bowl is 16%.

First-time Super Bowl champions -- AFC or NFC -- generally portend an average S&P 500 return of 9%.

The average S&P 500 return when an NFC team won was double that of when an AFC team won: 15% average market return following an NFC victory compared with 7% average market return following an AFC win.

If the Game Is High-Scoring:

Over the past 43 years, the approximate median combined total score is 45 points, and the current over/under is 56 1/2 points.

The average S&P 500 return for years when the combined total score was 45 points or greater has been 17%. For years when the total combined score was under 45 points, the average market return has been 7%.

Considering the average historical stock market return over the course of history is somewhere around 11%, let's hope the Colts and Saints put as many points on the board as possible.

And, go Colts! Or Saints, for that matter.
No positions in stocks mentioned.
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