Doug Kass: My 2023 Stock Market Super Bowl Indicator

In recent years, the heavier the Super Bowl advertising by a company or industry, the more likely its stock or sector will underperform… and vice versa — if an industry is underrepresented it may outperform the major indexes.

My 2022 ‘Stock Market Super Bowl Indicator’ called for a bitcoin short as cryptocurrency companies were conspicuous advertisers last year. That was quite prescient as bitcoin more than halved last year and its largest player, FTX, filed for bankruptcy. Cryptocurrency companies are conspicuous by their absence this year after making a splash last year.

A year earlier, my 2021 “My Super Bowl Indicator” said to short beer and food stocks — as well as Robinhood (HOOD) — and to buy auto stocks which were underrepresented for the first time in year. Beer and food were indeed 2021 market laggards and Robinhood’s shares peaked at $83, and are now $11. On the other hand my Indicator said to buy underrepresented auto stocks — Ford’s (F) stock rose by about +135% and General Motors (GM) shares gained about +39% in 2021, far in excess of the +26% advance in the S&P 500.

This year’s group of Super Bowl advertisers include the typical universe of automakers, consumer product companies and technology-based advertising, while the usual celebrity cameos will include Adam Driver, Tony Romo, Kevin Garnett, Will Ferrell and Serena Williams.

The absence of any new or concentration in industry or sector specific advertising may suggest a dull and/or flat year for the markets — perhaps, in line with one of my “10 Surprises for 2023 “(that the S&P will be unchanged):

“2023 is “A Tale of Two Cities” – far different than consensus: I see the strong possibility of an up market in the first half and a down second half – flat for the full year!”

My 10 Surprises for 2023

However, for the first time since 2013 Apple (AAPL) is replacing PepsiCo (PEP) as the Half Time sponsor. Perhaps it is time for caution on Apple’s shares?

“2020 was a great year… Not! It really sucked donkey. We just wanted to say we will see you soon for the game. We will see you on the Big Bowl…”

Wayne’s World 2021Super Bowl commercial

Super Bowl LVII (2023)

On Sunday, one of the grand sporting events of the year will take place: Super Bowl LVII.

Back in January 2000, I created a brand new stock market Super Bowl indicator as a contrary indicator, very similar to the cover of Time magazine.

My indicator dictates that the more intense the Super Bowl TV advertising by a group of companies, particularly in a specific industry, the more likely the stocks of those companies will perform poorly in the year ahead. Conversely, a reduction in an industry’s Super Bowl commercials augurs well for the stocks in that sector.

My great pal, Barron’s Alan Abelson (RIP), was kind enough to include and highlight my newly minted indicator in his “Up and Down Wall Street” column during the weekend of the 2000 Super Bowl — and writing this makes me so nostalgic regarding my weekly conversations with him.

23 years ago, my Stock Market Super Bowl Indicator gave a clear warning alarm to the end of the Dot-Com bubble.

As the late Alan Abelson wrote at the time:

“As it happens, last week’s tech wreck was accurately forecast by a remarkable new stock-market indicator, one we’re proud to print for the first time anywhere, the Stock Market Super Bowl Indicator.

Before you start yapping about it being old hat — or old helmet — we respectfully suggest you cool it. Pure and simple, our new indicator has nothing to do with the old Super Bowl indicator. Unlike the latter, its predictive power doesn’t depend on the outcome of the Super Bowl or, more specifically, whether the winner represents the National Football League’s American Conference or the National Conference.

Our brand-new Stock Market Super Bowl Indicator is a contrary indicator, kind of like the cover of Time. Its critical components are the commercials carried on television coverage of the event and the identity of the companies doing the advertising. Its virtue is not as a forecaster for the market as a whole, but for individual sectors of the market.

The indicator is the handiwork of Doug Kass, a kindly hedge-fund operator who, despite a propensity to short quantum leapers, wound up last year with an improbable performance matching Nasdaq’s improbable performance.

Simply put, the more intense the Super Bowl TV advertising by a group of companies, the more likely the stocks of those companies — and others of a kindred ilk — will do poorly in the year ahead. For 2000, we’re sorry to report, the indicator is flashing red for the Internet crew.

By Doug’s count, roughly 12 of the 30 companies shelling out an average of $2 million for 30-second spots are dot.coms. That’s four times the number of ‘Net outfits that made their pitch on Super Bowl TV last year and compares with only one in each of the prior two years.

What’s more, for the first time, an Internet company, E*Trade, is sponsoring the half-time show. That’s known in locker-room lingo as piling on.

If nothing else, the greater the number of look-alike or sound-alike companies doing the shilling, the less the impact of the individual shills. And in fact, there seems to be more than a modicum of evidence that for the viewer, the link between the commercial and the sponsoring Web company barely registers.

Making the auguries all the darker for those dozen dotcoms is the sad history of the sole ‘Net TV advertiser during Super Bowls XXXI and XXXII, A ’99 IPO, the stock peaked at $48 and, last we looked, was a hair under 17.

Without Wall Street, Silicon Valley would not have been able to remove the burden of salaries from its operating statements and substitute stock options for cash compensation. Without the lovely boost to earnings afforded by the incredible lightness of labor costs, earnings growth would be considerably less, and so the multiples awarded that growth would be merely ridiculous instead of absurd. There would be only a quarter as many West Coast billionaires and half as many millionaires.

In like manner, since the vast bulk of Internet companies are bereft of even a hint of cash flow, Wall Street has, via stock offerings, endowed them with the means of promoting their wares, not only on TV during the Super Bowl breaks but also in newspapers and magazines, on billboards and in subway cars and every other space known to advertising man.

If, indeed, we are rapidly reaching the point of cognitive congestion where the consumer is under such assault from so many dot.coms that they have begun to merge in his psyche into one big indivisible glob, that spells trouble in capital letters. And not only for the ‘Net companies, but also for the media on which that vast flow of lucre has been lavished.”

– Alan Abelson, Barron’s (January 2000)

Of course, the rest was history, as one of the largest stock market declines, especially of a technology and Internet kind, occurred during the subsequent few years.

For 30 Seconds of Your Time

Here is the recent Super Bowl commercial price history:

2019 $5,300,000

2020 $5,600,000

2021 $5,500,000

2022 $6,500,000 Estimated. Ads were sold out on Feb 3. Several 30 second spots went for as high as $7 million!

2023 $7,000,000 One 30 second spot went for as high as $10 million!

Here is a complete list of 2023 Super Bowl advertisers, here and here.

In total there are 52 companies or organizations that will be advertising during the 2023 Super Bowl.

The typical supporting cast of automakers, consumer products and technology companies comprise the list, including the usual suspects — Budweiser (BUD) , General Motors (GM) and Ford (F) , T-Mobile (TMUS) , KFC (YUM) , P&G (PG) and Coca-Cola (KO) and PepsiCo (PEP) .

There is no industry or category specific concentration of advertisers this year.

The only new advertisers include The American Petroleum Institute and Intel (INTC) .

There are more online gaming companies than is typical producing Super Bowl ads, including Mobile Strike, Top Games USA and first timer World of Tanks.

Reviewing 2021’s Super Bowl Advertisers

Although nothing will top 2020’s Super Bowl Halftime show featuring Shakira’s tongue, 2021 marked another year of unique and weird ads — e.g., Tide focusing on a Jason Alexander’s sweatshirt, and Cheetos dropping Ashton Kutcher’s first single — a total pissa of an ad #Itwasn’tme!

Much like literally everything else, Super Bowl LV advertising was affected by the coronavirus – with huge names like Coke (KO) and Pepsi (PEP) sitting this one out, although Pepsi continued to sponsor The Half Time Show.

In total, there were about 38 advertisers, some with multiple product ads, consisting of only three auto companies, 12 food, eight beer companies, four technology companies, four in financial services, nine consumer product companies — and of course… drum roll… Robinhood HOOD!

For the tenth time, Pepsi was the sponsor for the half time Super Bowl ceremonies.

I concluded in 2021 that the proliferation of beer and food companies compared to previous years could pressure those sectors over the balance of 2021. On the other, auto stocks are underrepresented vis-a-vis prior Super Bowls. They proved to be great buys.

Reviewing 2022’s Super Bowl Advertisers – The Same Old, Same Old (Except for FTX and!)

Source: AdWeek

There were roughly 40 companies that purchased commercial time to advertise in last year’s Super Bowl.

There were all the familiar names that seem to repeat annually — Budweiser and Michelob (BUD)  , automobile companies (GM) , KIA, Carvana (CVNA)  , BMW, Nissan (NSANF) , the Avocados from Mexico, Hellman’s and Pringles, and Expedia (EXPE)  and so on — nothing new on the horizon, except…

There were two conspicuous and new entrants that were forking up the big bucks — both in the cryptocurrency field:

Cryptocurrency Exchange FTX Joins Super Bowl for First Time

Last year I wrote that cryptocurrency is here to stay. With buying naming rights to the Staples Center and NBA star Kevin Durant partnering with Coinbase, the new technology and sporting world have formed a fast and friendly relationship. Cryptocurrency exchange FTX is getting in on the action, purchasing a Super Bowl Ad for LVI, but it has not released any creative details yet. Valued at $25 billion, FTX recently purchased the naming rights to an arena in Miami for $135 million. The company has also recently named stars Tom Brady, Gisele Bündchen, Stephen Curry and Shohei Ohtani brand ambassadors. Adds to Cryptocurrency Blitz; Will Air First Super Bowl Commercial Ever

Cryptocurrency and sports have continued to develop a relationship and that burgeoning partnership is reaching a fever pitch. Cryptocurrency exchange has announced that it will be running its first Super Bowl ad according to the Wall Street Journal. It’s another notch on the brand’s belt as it recently paid a reported $700 million for the naming rights to the Staples Center Arena in Los Angeles. also became a sponsor for the 2021 Coppa Italia Final earlier this year. Actor Matt Damon appeared in a spot for the brand in late October.

The rest was history — at least from the standpoint of an historical decline in the price of bitcoin and the failure of FTX.

Relatedly, a few months ago I warned about celebrity endorsements in this column.

Bottom Line

An analysis of 2023 Super Bowl advertisements and spend suggest no real outliers — either new entrants or concentration of expenditures.

Perhaps this is indicative of a flat year in the markets.

With Apple (AAPL) replacing PepsiCo (PEP) as The Half Time sponsor, we might consider a cautious view towards the company.

(AAPL, F and PEP are holdings in the Action Alerts PLUS member club. Want to be alerted before AAP buys or sells these stocks? Learn more now.)

(This commentary originally appeared on Real Money Pro on February 9. Click here to learn about this dynamic market information service for active traders and to receive Doug Kass’s Daily Diary and columns from Paul Price, Bret Jensen and others.)