Sports Illustrated Swimsuit Issue: Score One For the Bulls

It's that time of year again!  On last night's Late Show with David Letterman, the cover model of this year's Sports Illustrated Swimsuit Issue was revealed to be America's own Kate Upton.  While we're all familiar with the Super Bowl Indicator, have you ever heard of the  Sports Illustrated Swimsuit Issue Indicator?  The Swimsuit Issue Indicator says that the US equity markets perform better in years where an American appears on the cover of Sports Illustrated's annual issue as opposed to years when a non-American appears on the cover.

The table below highlights the annual performance of the S&P 500 since 1978.  For each year, we also show the country from which that year's Sports Illustrated Swimsuit Issue cover model came from.  Since 1978, an American has now appeared on the cover of the annual Sports Illustrated Swimsuit Issue in 18 different years.  The average total return of the S&P 500 during the 17 prior years has been a gain of 14.3% with positive returns 88.2% of the time.  Of the 17 years where no American appeared on the cover, the S&P 500 has averaged a total return of 10.8% with positive returns 76.5% of the time.  To be sure, we would note that the S&P 500's 38.5% decline in 2008 when an American appeared on the cover caused the spread between the two performance numbers to narrow considerably.

Last year, the Swimsuit Indicator only partly worked.  While the S&P 500 saw a total return of 2.1% in a year when Russian model Irina Shayk graced the cover, in terms of price performance, the S&P 500 actually saw a slight decline (-0.003%). 

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Year Native Country of Cover Model S&P 500 (Total Return %) 1978 Brazil  6.6   1979 USA 18.6   1980 USA 32.5   1981 USA -4.9   1982 USA 21.5   1983 USA 22.6   1984 Czechoslovakia 6.3   1985 Czechoslovakia 31.7   1986 Australia 18.7   1987 Australia 5.3   1988 Australia 16.6   1989 USA 31.7   1990 Spain -3.1   1991 USA 30.5   1992 USA 7.6   1993 Sweden 10.1   1994 Multiple (NZ, US, AU) 1.3   1995 Czech Republic 37.6   1996 Multiple (AR, US) 23.0   1997 USA 33.4   1998 Germany 28.6   1999 USA 21.0   2000 Czech Republic -9.1   2001 Mexico -11.9   2002 Argentina -22.1   2003 Czech Republic 28.7   2004 Czech Republic 10.9   2005 USA 4.9   2006 Multiple (AR,AU,CH,MX,NZ,US) 15.8   2007 USA 5.5   2008 USA -37.0   2009 Israel 26.5   2010 USA 15.1   2011 Russia 2.1   2012 USA