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Companies in the same city as the Super Bowl's victor outperform a benchmark stock index for a month after the National Football League championship game is played, Goldman Sachs says.
Gains in shares of the team's sponsors and improvements in the home city's economy after the victory may explain the phenomenon.
Goldman wrote in a note that shares of such companies have beaten the Standard & Poor's 500 index by an average of 0.17 per cent in the month after the game.
In addition, "investors from the winning city may buy more stocks after a win because they feel a sense of joy and optimism.
"These investors are typically more familiar with regional companies or perhaps have a stronger relationship with management because of the close proximity."
The Indianapolis Colts beat the Chicago Bears 29-17 in the Super Bowl yesterday in Miami.
Shares of companies based in Chicago have risen about twice as fast as those in Indianapolis during the past 12 months. The Bloomberg Chicago index has advanced 16 per cent during that period as the Bloomberg Greater Indianapolis index added 8.6 per cent.
FTD, a network of florists, had the biggest advance in Chicago, doubling since last year while Accuride, a maker of steel and aluminum wheels, has led in Indianapolis..
Both the teams in this year's Super Bowl have roots in the original National Football League. Robert Stovall, who has tracked the relationship between the game and stocks for three decades, says that in 32 of the 40 years the game has been played, stock movements reflected the result.
"That gives us a winning percentage of 80 per cent, which is better than any gaggle of gurus or nest of Nobel Prize winners I know of," said Stovall, of Wood Asset Management in Florida.
Stovall discovered the connection in a newspaper story in the 1970s and published the first study on the topic in 1979. By the 1990s, the theory had proved correct about 90 per cent of the time.
Stovall said he judged market performance by the directions of at least two of three measures: the Dow Jones industrial average, the S&P 500 and New York Stock Exchange composite index.
- BLOOMBERG
