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49ers SuperBowl Wins and Markets!

America's National Sports Day (also called SuperBowl) is here! Nearly 100 million plus Americans will be glued to their TV sets on Sunday afternoon to watch history in making (will explain later) as well as advertisements which cost $5.6 million for 30 seconds and JLo/Shkira performances during half-time! There would be Super Bowl parties, tailgate parties, and so on. This year is special for multiple reasons:

  • After long time, Patriots are not in SuperBowl. Instead two most exciting teams are playing.
  • If KCC wins, it would be their win after 50 years; If 49ers win (which is what everyone in bay area is rooting for), it would be their first win in 25 years - that's why this is historical!
  • First time, sports betting in 18 states is legal so Americans will be betting over $6 billion on anything related to SuperBowl (even how long Demi Lavato's Anthem performance will take in seconds)
  • 49ers would match the record of most SB wins (6 if they win)
  • KCC's last win was when Patrick Mahomes' (KCC QB) father was also not born. I am sure Kansas City have been waiting for this for longest time
What about stock markets? Let's look at how market returns were in previous 5 49er's wins.
  • 1982 - 14.76%
  • 1985 - 26.33%
  • 1989 - 27.23%
  • 1990 - minus 6.56%
  • 1995 - 34.11%
That means 49ers SB win can predict above average double-digit market returns 80% of time!
I know this is not at all scientific. But hey, I want America to root for underdogs 49ers to win SuperBowl. Sorry KCC - when you won last time (1970), markets barely broke even (.10%) and none of us want that.
Given the recent market turmoil due to spread of coronavirus impacting China and world economy, potential surprise win by Sanders in Iowa caucus and bear market in commodities, investors are anxious. Suddenly the narrative has changed at least last week. But that may be short-term. Impeachment drama will be over next week. After Iowa, Biden may resume his momentum assuring markets that leftist candidates (Sanders and Warren) will not get democratic candidacy. So if you are looking for potential bottom, it may come early next week. During this churn, Semi and biotech ETF (SMH and XBI) provide good entry point as they would recover quickly when markets resume it's upward trend.
That's all for now. Enjoy the SuperBowl and Go 49ers!

/Shyam

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