Baseball Joins the List of Whimsical Market Theories
NEW YORK (AP) _ Forget the Dow Jones industrial average, the Standard & Poor’s 500 and comparisons of trading volume. The question on Wall Street is: Did the Mets beat the Cardinals?
The latest whimsical stock-market theory is that stock prices move inversely with the fortunes of the New York Mets, currently in a neck-and-neck race for baseball’s National League East leadership.
Wall Street’s history is rich with such theories, especially during the dog days of summer.
There was the ″Hemline Indicator,″ attributed to the late Ralph Rotnem of the old Harris Upham (now part of Smith Barney, Harris Upham & Co.), which correlated the direction of stocks with rises and falls in the length of women’s skirts.
More recently there was the ″Super Bowl Indicator,″ in which the outlook for stocks was determined by whether a team from the American or National conference won football’s title game.
Under the Mets theory, the near-term outlook for stocks is somewhat bearish. The Mets currently are battling the St. Louis Cardinals for the lead in the National League’s Eastern Division.
The theory was put forward last week by Anthony W. Tabell, managing director of the investment firm Delafield, Harvey, Tabell Inc. of Princeton, N.J.
Tabell said in an interview that he first noticed the relationship in 1969, when the ″Miracle Mets″ were on their way to ending years in or near the National League cellar by winning their first pennant and World Series and stocks were in a slump.
Then a few weeks ago Tabell went to a Mets game at New York’s Shea Stadium. The day’s program included a recap of the Mets’ performance since 1969, and Tabell began comparing that record against the stock market.
The result: Tabell’s theory, which he acknowledges was written while his tongue was ″very, very deeply″ in his cheek. But consider some of the ″evidence″ nonetheless.
The Mets were born in 1962, when they lost 120 games and finished last. They also finished last the next three years. During that period, Tabell recalled, there was ″a four-year bull market which topped out in 1966″ - the first year the Mets managed not to finish last.
By the time of the Mets’ drive in 1969, ″the market had entered the worst period of lassitude in the 1968-1970 bear market, with volume running under 10 million shares (daily),″ Tabell said.
″The bottom was during the season in 1970, when the New Yorkers failed to repeat and dropped to third place,″ he continued. ″Two more years of a bull market ensued during which the Mets could do no better than third.
″The market topped out in January 1973 and was undergoing its initial declining phase during the summer when (Met relief pitcher) Tug McGraw’s cry of ‘You Gotta Believe 3/8’ was lifting the Mets to their second NL pennant.″
″Not surprisingly,″ Tabell added, ″a strong bear-market rally took place during the World Series while the Mets were losing to Oakland.″ In the week ended Oct. 5 of that year, the Dow Jones industrial average jumped 24.15 points.
While the market currently is in the third year of a general bull rally, its most recent major ″correction,″ or major pullback, bottomed on July 24 of last year, Tabell said. At the time, the Mets were off to a strong start in the 1984 season.
″The market recovery, from 1,086 (in the Dow Jones industrial average) to over 1,200 in September, coincided, of course, with their blowing the pennant by losing eight of their nine final games with the (Chicago) Cubs,″ he said.
In the four weeks ended this past Aug. 16, the Dow Jones industrials skidded 46.82 points while the Mets surged into contention for the NL East lead with the help of a nine-game winning streak.
What inspired Tabell’s theory? August has been dull, he replied, and ″I really didn’t have anything new to say about the market. Statistically, you could shoot it full of holes. But I did it just to show how easy it is to come up with a kooky theory and make it sound plausible. It’s basically for fun and shouldn’t be taken for anything more than that.″
One can only wonder what Casey Stengel would have said about it.