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Asset Markets, The Sports Illustrated Jinx, And The Dodgers

Asset Markets, The Sports Illustrated Jinx, And The Dodgers

Why is there is a Sports Illustrated jinx and magazine cover stories often signal a sign of a top or bottom of the subject being portrayed?

Regression to the mean, or, more simply, just moving back to the long-run averages.   

Dodgers Tank After SI Cover Story

After going on a tear of 51-9,  the best 60 game winning stretch in 105 years,  the ink was barely dry on the August 28th Sports Illustrated’s cover, which read, “Best Team Ever,” before the Dodgers went into a major tailspin.

Dodgers_SI_Jinx

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“Best. Team. Ever?” The ink was barely dry the cover of our Aug. 28 issue—which hit newsstands Aug. 23, with a corresponding comparison to the greatest teams in history online—when the Dodgers fell into a tailspin that they have yet to escape. Through Aug. 25, they had gone 91-36 for a .717 winning percentage, which put them on a 116-win pace, good enough to tie the 2001 Mariners for the highest total of the 162-game expansion era. Since then, they’ve lost 10 of 11 to the Brewers, Diamondbacks and Padres, and while they still have an ample cushion to win the NL West and wrap up homefield advantage in the National League playoffs, they’ve shown that even if the infamous Sports Illustrated cover jinx is a myth, this squad is hardly invincible.  –  Sports Ilustrated, September 6

Sports Illustrated Cover Jinx A Myth?

We disagree.

Teams, players, politicians, companies,  markets or, whatever or whoever, always seem to be cover stories either at at their peak or nadir.   For sure,  the Dodgers 51-9 winning stretch was unsustainable, and the law of averages had to kick in.

Black Swans Are Rare

We do admit there are on rare occasions when Black Swans come along that defy all probabilities and shatter age old records.  Rarely.

…click on the above link to read the rest of the article…

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