Super Bowl Stock Market Indicators Are Passé; Instead, Track The Dog Show
Years ago someone came up with a stock market indicator that emits a signal just once a year, but was fairly accurate: when teams from the old National Football League won the Super Bowl, the market tended to trade up for the year, something like three-fourths of the time.
With the leagues merging, and teams moving, interpreting this once-simple indicator has become a homework exercise. I propose an equally simple-minded, up-or-down annual indicator based on the results of the Westminster Dog Show. The 2010 show kicks off next Monday, February 15.
(Disclaimer: This forecasting tool is presented for entertainment only. I can't find the original quote, but the NYT's sublime investment commentator Floyd Norris is supposed to have once remarked that
"Anyone foolish enough to bet on a game based on the stock market, or credulous enough to believe that a football game can forecast the stock market, probably should hire an investment manager, a psychiatrist, or both."That goes double for the dog show.)
My new indicator has the benefit of a longer history than the Super Bowl, and it is not fouled by data problems (the Westminster Show goes back to the 1870s, although I rely on data only from 1926, after the show changed its judging format). This method also offers more of what the statisticians call "degrees of freedom," that is, more inputs than the Super Bowl method. I also happen to find my approach more interesting than the Super Bowl these days, as I am both looking for a dog, and will attend Westminster next Tuesday for the finals.
Let's look at the Tale of the Tails:
When it comes to individual breeds, what stock investors want first and foremost is a win by a Poodle. Poodles have won Westminster eight times since 1926, and after six, or 75 percent, of those wins, the stock market closed up for the year. The historical proportions are the same for either standards or miniatures.
For some other breeds:
- Pointers and Doberman Pinschers are neutral market indicators. Each has won 4 times, and the up and down markets afterwards have been evenly split.
- Odds are against us after a Cocker Spaniel win.
- Also beware the Wire-Haired Fox Terrier: I love those little guys but they have given us 7 victories followed by 6 market declines.
- Spaniels: A win is positive -- wins in up years beat losses 3 to 1.
- Terriers: Also positive, but less so -- 22 wins in up years, 9 wins in down years.
- Miniatures & Exotics: Up markets when they win outnumber down markets 2 to 1.
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