With tomorrow's racing of the Belmont Stakes, all eyes will be on Big Brown as the horse attempts to win the Triple Crown for the first time since 1978. To horse around a little, we looked to see how stocks have performed during Triple Crown years, and the trend is disconcerting. Of the eleven prior winners, three occurred during the Great Depression and three occurred during the 1970s - not exactly good years for the stock market. In total, the average performance of the S&P 500 during years when there was a Triple Crown winner was a decline of 4.2% with positive returns in only three out of eleven years (27.3%).
While there have been eleven Triple Crown winners, there have also been 20 Triple Crown misses, where a horse won the first two legs, but failed to win the Belmont. In these years, the performance of the Dow was considerably better with an average return of 7.8% and positive returns in fifteen out of twenty years (75%). For reference, the overall average return of the S&P 500 over the same period has been a gain of 7.6% with gains in 63 out of 96 years (65.6%). For the bulls, this gives them even more reason to root for Casino Drive.