Conscientious Financial Planning and Retirement Income Management | 201-741-9528
from Lonier Financial Advisory LLC, Osprey, FL

Beware the Head Fake

Beware the Head Fake

A jest if not a full-blown parody, and fun for that, Bespoke’s blog post “Is the Superbowl the Biggest Obstacle Now Facing the Market” also casts some sidelight on the weakness in much of what passes as serious technical and even some fundamental security analysis.

The short post strings together these nuggets of data mining:

[list style=”orb” color=”blue”]

  • Both the Giants and the Pats have won the SB three times, so the winner will have four victories tying the Packers for fourth for total wins (is ‘four’ the Fibonacci number of football?)
  • Across the three years of previous Giants wins, the S&P declined an average 6.6% from SB day to year end, and for the Pats, declined an average 3.6% (there were 3 winning and 3 losing years in total for the S&P, but the losses won out, so to speak)
  • On the other hand, when the NFC wins, the S&P gained an average 10.64% with wins 19 out of 24 years, while for the AFC, it gained an average 3.44%, winning 13 out of 21 years the AFC triumphed

[/list]

Maybe this proves, at least for the heirs of the old National Football League, that you can win in the market over the long term! Or maybe it just shows you should be very careful drawing conclusions about how to invest your money based on interesting but causally unrelated coincidences, no matter how sophisticated the math or ‘logic’ appears. As in how the market behaves in presidential election years, or after a Democrat or Republican wins the office, or according to your favorite Dow Theorem or Elliot Wave pattern of choice.

Not that there isn’t some sort of contrarian logic available to counter the behavioral investing patterns of the mob. Just watch out for the quarterback’s head fake. You’re playing with your own money, after all.

Leave a Reply

Your email address will not be published.