The new Sports Illustrated Swimsuit Issue hit newsstands this week, and gracing the cover with her curvaceous cuteness is the über-sexy Kate Upton. This is the second-consecutive year that the all-American hottie has graced the magazine’s most widely “read” issue, much to the delight of gentlemen around the world.
Now, as much as I’d like to continue writing about Upton’s ultra-gorgeous appearance, this site is all about money and investing, so I am going to have to keep my commentary to the subjects at hand. Fortunately, there is a connection between stocks and the SI Swimsuit Issue, and following that connection could actually put some money in your pocket.
A few years ago, money management and research firm Bespoke Investment Group crunched a few seemingly unlikely numbers and came up with something called the Sports Illustrated Swimsuit Issue Indicator. According to this indicator, U.S. equity markets tend to perform better in years when an American girl is on the cover of the magazine.
Yes, this might sound a little silly, but the numbers certainly confirm the statistical efficacy of the indicator. According to Bespoke, since 1978, an American has appeared on the cover of the annual issue in 18 different years. A little research confirms that the total average return of the S&P 500 Index during those years is a gain of 14.4%, with positive returns 88.9% of the time.
During the 17 years where a non-American model appeared on the cover, the S&P 500 averaged a total return of 10.8% with positive returns 76.5% of the time. The one big anomaly in the indicator is 2008, when American supermodel Marisa Miller was on the cover. That year, the S&P 500 sank 38.5%, so, save for that disastrous year, the relative outperformance of the American beauties would have been much bigger.
As for Kate Upton, well, the model already is a big hit with Wall Street. Last year, when Upton made her debut on the cover, and the S&P 500 registered a 16% total return. If the market smiles on Kate again this year, then investors who buy into the hot-American-girl theory could end up enjoying some pretty hot gains.
But hey, whatever happens with the markets, it never hurts to appreciate the beauties in the pages of the Swimsuit Issue. So, I say embrace your birthright as an American male (or female) and get yourself a copy now, before the issue sells out.
Oh, and it probably wouldn’t hurt to be long stocks right now, given the Fed-fueled bull market.
Follow Jim on Twitter: @Woodsish.