Chuck Jaffe: The 7-year curse: If you’re thinking of investing in certain Super Bowl advertisers, be forewarned

by | Feb 13, 2023 | Stock Market

Want a sure-thing wager on the Super Bowl? Boy, do I have a proposition for you. I am not talking about one of the wild prop bets on this year’s game, where you can wager from the coin toss and opening kickoff to the color of the winning coach’s bath of Gatorade and everything in between.

Nor am I suggesting that you seriously consider the “Super Bowl Indicator,” betting on the market’s direction for the year based on the game’s outcome. Hidden in the plain sight of the Super Bowl for years now is an investment anomaly that might be worth betting on: any company advertising during a Super Bowl within seven years of its IPO is headed for trouble. Before assuming recency bias based on last year’s Super Bowl — the current pinnacle of the phenomenon — recognize that this tendency has come up many times in the last quarter-century, which is as far back as I looked. My research here is more cursory than comprehensive. I examined lists of Super Bowl advertisers for 25 years but wasn’t exhaustive in making sure every possible advertiser was there. Some stocks disappeared via mergers; I didn’t look backwards at companies that advertised in years ahead of their IPO. I believe my indicator works best when ads are within five years of the IPO but it holds with nearly all companies buying ads within seven years. I did not determine whether the indicator is more a jinx — a sign of trouble for a few years — or a death knell. I started searching in the late 1990s because that’s when the price of a 30-second ad went well over $1 million; I believe ad prices p …

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