Sports Illustrated Swimsuit Indicator

It's that time of year again! Monday night on the Late Show With David Letterman, Sports Illustrated revealed that this year's cover model for the annual swimsuit issue was Israeli model Bar Refaeli.

Based on the vaunted Swimsuit Issue Indicator, what does this mean for the market? Over the last 30 years, an American has appeared on the cover of the annual Sports Illustrated Swimsuit Issue in 16 different years. The average performance of the S&P 500 during those 16 years is a gain of 10.6% with 13 positive years (81.3%).

Of the fifteen years where no American appeared on the cover, the S&P 500 has averaged a gain of only 7.2% with 11 positive years (73%).

Last year's market decline of 38.5% hurt the overall average return for years when an American appeared on the cover (somebody check Marissa Miller's passport), illustrating that like the Super Bowl indicator, there are always exceptions to the rule. In the table below, we highlight the native country of the model appearing on each year's issue as well as the performance of the S&P 500 that year. While this year's cover model indicates the less attractive scenario for the market, at this point most investors would probably be pretty happy with a gain of 7.2% in 2009.

Year	Country	S&P 500 (%)
1978	Brazil	1.1
1979	USA	12.3
1980	USA	25.8
1981	USA	-9.7
1982	USA	14.8
1983	USA	17.3
1984	Czechoslovakia	1.4
1985	Czechoslovakia	26.3
1986	Australia	14.6
1987	Australia	2
1988	Australia	12.4
1989	USA	27.3
1990	Spain	-6.6
1991	USA	26.3
1992	USA	4.5
1993	Sweden	7.1
1994	Multiple (NZ, US, AU)	-1.5
1995	Czech Republic	34.1
1996	Multiple (AR, US)	20.3
1997	USA	31
1998	Germany	26.7
1999	USA	19.5
2000	Czech Republic	-10.1
2001	Mexico	-13
2002	Argentina	-23.4
2003	Czech Republic	26.4
2004	Czech Republic	9.0
2005	USA	3.0
2006	Multiple Countries	13.6
2007	USA	3.5
2008	USA	-38.5
2009	Israel	???

Comments

[Phiota:]

In that case bring back:

Germany 26.7

German Swimsuit Models, only drink Pepsi's on Third Sundays of Feb, Wash your Sunday clothing on Wednesdays, Pray that Brazil wins the world cup, China wins Gymnastics in 2009....any others?

Feb 11 03:02 AM

[Heaven, Hel...:]

Ah yes, a reminder that correlation does not imply casuality!

Feb 11 09:14 AM

[RSAAKS:]

A request for Bespoke group, or anyone else who may want to answer a question I have? or anyone who thinks it is even worth an answer.
1. How much total $ currency is in circulation now?
2. With planned TARP+stimulus etc, how much more $'s will be added into the circulation
3. and this is the real question: for every $1trillion added to the circulation, how much inflation should be expected, assuming none of the added $'s are ever removed? Does addition of 10% $'s translate into 10% inflation? or is the math more complex

Feb 11 10:01 AM

[SBgal:]

Things must be awfully slow around Bespoke Investment for them to have time to waste on such foolishness.

Feb 11 11:38 AM

[Conan the B...:]

Thanks guys, something like this helps relax an otherwise stressful day.

SBgal: its a guy thing. If a Men's Calendar were shown, I would react similarly to yourself, but I wouldn't lend it credence by commenting on it.

IMO

Feb 11 12:10 PM

[henarl:]

Don't exactly know how important this is to investing but the research for the article must have been fun.

Feb 11 01:48 PM