Leave it to Barron’s “Up & Down Wall Street” columnist Alan Abelson to point out the economic significance of the selection of Kate Upton as the cover model for the Sports Illustrated swimsuit edition. (Power Line is determined to keep on top of this important story, needless to say.) Abelson’s column requires a subscription to read online, but here’s the relevant part. It turns out that the stock market does significantly better in years when an American model is on the cover, instead of a foreign model. Abelson credits the work of the Bespoke Investment Group for coming up with the “Sports Illustrated Swimsuit Issue Indicator.”
That little known measuring rod shows that since 1978, whenever an American graced the swimsuit cover, the total return for the S & P 500 averaged an annual gain of 14.3% and was on the plus side 88.2% of the time, while during those years when no American was on the cover, the index averaged a total return of 10.8% and was positive 76.5% of the time. . .
So should you rush out and buy stocks? Abelson’s not so sure, but he offers this consolation:
To be sure, if you follow the implicit recommendation of the Sports Illustrated cover no matter what the market does, at the very least you have the magazine to leaf through.