Super Bowl indicator 'has promise'

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Posted: Sunday, February 3, 2013 12:00 am

Time for the annual Super Bowl-stock market prediction, and this year we turn to Bob Johnson, finance professor at Creighton University.

Bob traces the history of the myth that when a team that belonged to the old National Football League wins the Super Bowl, the stock market gains in the coming year, and when a former American Football League team wins, the market drops.

Based on the Dow Jones industrial average, the prediction has been true for 35 out of the 46 Super Bowls, a success rate of more than 76 percent.

This year, the San Francisco 49ers are the former NFL team, and the Baltimore Ravens count as a former AFL team, Johnson argues. (He says that even though the Ravens were moved to Baltimore from Cleveland, where they were called the Browns and were part of the old NFL. The league added an expansion team in Cleveland called the Browns, which Johnson says puts the Ravens into the AFL category.)

The predictor was proposed by New York Times sportswriter Leonard Koppett in 1978, when 10 out of 11 previous game outcomes correctly “predicted' the following year's market, Johnson writes.

What's the explanation?

The stock market usually goes up anyway (33 of the last 46 years), and old NFL teams generally win the Super Bowl (33 of 46 years), so the two are likely to coincide more than average — 28 times, to be exact. Since 1966, former NFL teams have won 71.1 percent of the Super Bowls, and the Dow average has grown 71.7 percent of the time. By simple chance, the “predictor” should be correct 59.5 percent of the time. (We'll take the professor's word on the calculations.)

But statistically speaking, Johnson says, the 76 percent success rate is “very surprising” because the probability of the indicator being right 35 or more times out of 46 Super Bowls is only 1.41 percent.

“It seems therefore, that the Super Bowl indicator has promise,” he says.

Just because the numbers are correlated doesn't mean that the game causes the market to go up or down. “We can conclude that there is a spurious correlation,” he says.

--Steve Jordon

NP Dodge to build at high-traffic corner

NP Dodge Real Estate is planning to move its West Pacific sales office to a new office building this fall.

The office at 178th and Pacific Streets will be replaced by a facility on the northwest corner of 204th Street and West Dodge Road.

The new 11,800-square-foot facility, designed by Omaha's Architectural Offices, will be visible, said NP Dodge's Mike Reidmann, to occupants of more than 28,000 cars passing by every day.

Construction should start within a month, Reidmann said. — Cindy Gonzalez

A bigger place for Habitat for Humanity

Omaha's Habitat for Humanity is giving up its old fire station digs. The nonprofit organization known for constructing houses for low-income buyers has bought a bigger, north Omaha property to call home.

Habitat's purchase of 1701 N. 24th St. will give it 35,000 square feet — more than twice the space it had in the old headquarters, a former fire station at 2204 Ames Ave.

The move also will allow all facets of the local Habitat, including office staff, construction materials and vehicles, to be on one campus, said spokeswoman Tracie McPherson.

The anticipated $3 million purchase and renovation cost is to be paid off with the just-launched $6 million capital campaign. — Cindy Gonzalez

Panel to discuss new JOBS Act

A new federal law may have an impact on business mergers, capital and acquisitions, and an Omaha group will meet this month for a panel discussion on the subject. The Association for Corporate Growth is hosting the event at 4 p.m. Feb. 12 at Happy Hollow Country Club.

The Jumpstart Our Business Startups Act, or JOBS Act, was passed last April. The law is designed to encourage funding of small businesses by easing some securities regulations.

To register, see acg.org/nebraska/events. Fees are $25 for ACG members and $50 for nonmembers. The discussion is followed by a networking reception from 6:30 p.m. to 8 p.m. — Steve Jordon

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