Investors are constantly trying to predict what economic indicators will do next and how the financial markets will respond. Will inflation remain stubbornly high? Will the Federal Reserve cut rates? Can AI continue to drive productivity gains? Will valuations expand or contract? Will earnings growth justify current prices? These are all reasonable questions. But after years of studying markets, reading annual reports, analyzing businesses, and attempting to understand the countless variables that influence stock prices, I’ve come to a surprising conclusion: None of those factors matter. The answer to predicting the stock market lies in a surprising place: football.

And this past year, the Seattle Seahawks (and my boy Sam Darnold) won the Super Bowl.

Therefore, the stock market is going up.

I realize that sounds ridiculous. In fact, it is ridiculous. Yet for a remarkably long period of time, one of the most successful stock market forecasting systems ever devised was based on exactly this kind of logic…on football.

The system was created by sportswriter Leonard Koppett and became known as the Super Bowl Indicator. At first glance, it sounds like something you would hear from a guy three beers deep at a tailgate. Yet for decades it produced results that made many professional investors look foolish.

And that’s precisely why it’s such a valuable lesson for investors.

The Greatest Investment Indicator You've Never Heard Of

In 1978, Koppett noticed a bizarre pattern. Looking back at the first 11 Super Bowls, he found that the outcome of the game appeared to predict the direction of the stock market for the rest of the year.

The rule was simple. If a team from the original NFL (or NFC) won the Super Bowl, the market would finish the year higher. If a team from the old AFL (AFC) won, the market would finish lower.

The remarkable thing was not the theory itself. The remarkable thing was that it had worked perfectly.

The first 11 Super Bowls matched the subsequent direction of the market 11 times out of 11. A success rate of 100%. Even after the streak was finally broken, the indicator continued to perform at a level that would make most professional investors jealous.

By the late 1990s, football had correctly predicted the direction of the stock market in 30 of the first 31 Super Bowl seasons. That is an accuracy rate of nearly 97%.

Think about that for a moment.

If you discovered an investment strategy that had been right 30 out of the last 31 years, would you ignore it? If a hedge fund manager had generated that track record, investors would have been throwing money at them. Books would have been written. Conference stages would have been filled. Financial media would have declared them a market wizard.

Instead, the predictor was football.

The Seductive Power of a Good Track Record

One of the central themes in Leonard Mlodinow’s excellent book (and one of my favorites) The Drunkard’s Walk is that people consistently underestimate the role of chance.

We are naturally drawn to outcomes. When we see a long streak of success, we assume skill. When we see a strong historical record, we assume there must be an underlying explanation.

After all, how could something be right that often if there wasn’t something meaningful behind it?

The Super Bowl Indicator is useful precisely because it strips away the illusion.

There is no plausible economic mechanism connecting the winner of a football game in February to the collective earnings power of thousands of publicly traded companies over the next twelve months. The outcome of the Super Bowl does not affect interest rates, productivity, innovation, consumer spending, or corporate profits.

Yet the indicator worked.

Or at least it appeared to.

This is where statistics becomes uncomfortable. Given enough data, enough observers, and enough possible relationships to examine, some patterns will emerge purely by chance. Most disappear without anyone noticing. A few persist long enough to attract attention. The rarest ones develop track records so impressive that people begin searching for explanations.

The explanation often comes after the success, not before it.

The Problem With Retrospective Genius

Imagine a million investors each using a different strategy. One follows interest rates. Another follows weather patterns. Another follows moon phases. And yet another follows football games.

Most of those systems fail. A handful get lucky.

The survivors attract attention because we only notice the winners. We rarely spend time studying the graveyard of failed theories that disappeared along the way.

This is a form of survivorship bias, and it shows up everywhere in investing.

We celebrate the fund manager who beat the market for fifteen years. Many of us read books by the entrepreneur whose company became a billion-dollar success (Guilty!). We listen to the investor who made a spectacular prediction. But what we often fail to see are the thousands of people who employed similar methods and failed.

The Super Bowl Indicator is essentially survivorship bias in its purest form. It is one of the lucky theories that survived long enough to become famous.

Then Reality Arrived

The most interesting part of the story is not the indicator’s success. It's what happened afterward.

As additional years accumulated, the predictive power began to deteriorate. The perfect early record gave way to occasional misses. Then more misses. Then many more misses.

Through the first few decades of its existence, the indicator looked almost magical. But over the longer run, the results steadily drifted toward something much closer to randomness. Depending on the measurement period and index used, the indicator has been correct roughly 70% of the time overall.

That may still sound impressive. But the recent record tells a very different story. In more recent decades, the indicator has struggled badly. From 2004 through 2024, it was correct only six times in twenty-one years. That is not just worse than its early record, it's worse than flipping a coin.

That pattern should sound familiar to investors. It's what statisticians call regression to the mean.

Strategies that appear extraordinary often become much less impressive as more data becomes available. What initially looks like genius frequently turns out to be a combination of skill, luck, and randomness that is impossible to disentangle in real time.

What This Means for Investors

The lesson is not that all successful investors are lucky. The lesson is that a strong track record alone is not sufficient evidence of skill.

If someone beats the market for one year, it means almost nothing. If they beat the market for five years, it is interesting. And if they beat the market for ten years, it deserves attention. But even then, we should remain humble about our ability to distinguish skill from luck.

The Super Bowl Indicator reminds us that randomness can produce results that look extraordinarily convincing. A pattern can persist for decades before ultimately revealing itself as coincidence.

Investors are especially vulnerable to this mistake because markets generate enormous amounts of data. With enough variables, correlations are inevitable. Some of them will be startlingly accurate for long periods of time. The challenge is figuring out which relationships are causal and which are simply statistical accidents.

That is why process matters. Evidence matters. Humility matters.

When evaluating an investment strategy, we should ask whether the results make sense. Is there a plausible reason the strategy should work? Has it worked across different time periods and market environments? Could the apparent success be explained by luck, data mining, or survivorship bias?

Those questions are less exciting than discovering a magical market predictor. But they are far more useful.

And at least to my eyes, and those with a lot smarter eyes than me, a passive investing approach in broadly diversified, low cost index funds is the only strategy that passes this sniff test. And that's why I use it.

My Official Forecast

So where does this leave us?

Well, the Seahawks won the Super Bowl. History tells us that this is apparently a significant macroeconomic development. Forget inflation reports. Ignore GDP forecasts. Pay no attention to interest rates.

The football gods have spoken.

Of course, that is not actually the lesson here.

The lesson is that a system once predicted the stock market correctly 30 out of 31 years despite having no plausible causal relationship to the market whatsoever. If that can happen, we should be much more cautious when evaluating any investing strategy based solely on historical results.

Backtests can be misleading. Track records can be misleading. Experts can be misleading. Even our own brains can be misleading.

The longer I invest, the more I appreciate how difficult it is to separate skill from luck and signal from noise. That uncertainty does not mean we should abandon rational analysis. Quite the opposite. It means we should remain humble about what we know and skeptical about conclusions drawn from limited data. Again, my conclusion from this is that luck and noise predominate in a system as efficient as the stock market, no matter what happens in football. Therefore, it is best to invest passively in the entire market.

Still, if the market finishes higher this year, I fully expect financial historians to remember that I publicly called it first.

Not because of earnings growth. Not because of falling interest rates. Certainly not because of technological innovation. But because the Seahawks won the Super Bowl.

What do you think? Is the Super Bowl Indicator valid? Does football correlate with the stock market? Would you have used this strategy after seeing it succeed in 30 of the past 31 years? Let me know in the comments below!