Prepare For A Global Financial Catastrophe If The Red Sox Win Tonight
In the unlikely event that you require another reason to root against that most loathsome of teams, remember what happened last time they won the World Series.
A National League team has won the World Series 33 times dating back to 1936. In the year following an NL victory, the S&P 500 has averaged a 14.3% gain, according to the data-crunching prowess by Richard Peterson, a director at S&P Capital IQ. That includes this year’s 24% rally after the San Francisco Giants, a National League squad, won the 2012 World Series.
By comparison, the S&P 500 has averaged a 9.3% increase in the 43 years after an American League franchise claimed the World Series….
Still, a deeper dive into the data shows bullish investors should support St. Louis. When the Cardinals have been victorious in America’s pastime, the S&P 500 has averaged an 8.3% gain. In the two instances in Mr. Peterson’s dataset when the Red Sox won the World Series – 2004 and 2007 – the stock market has generated mixed results.
The S&P 500 rose 3% the year after the Red Sox broke their 86-year curse in 2004. But the market plunged 38% in the year after Boston’s 2007 victory due to the financial crisis. That marked the worst performance following a World Series win at least since 1936, Mr. Peterson said.
On the other hand….
When a World Series lasts six games, the S&P 500 goes on to average a 15.3% gain over the next 12 months no matter which league is victorious, Mr. Peterson says. When the series goes the full seven games, the average return is 8.4%.
Which is not good, but which is not a 38% decline. Go Cards.
Morning MoneyBeat: For the Love of the Markets, Root Against the Red Sox [WSJ MoneyBeat blog]
