Our Investor Pick for the AFL Grand Final

Today is a public holiday in Victoria.

Why? Because tomorrow is the AFL Grand Final day.

We know. It doesn’t make sense. It’s another odd and unique Australian public holiday. It ranks up there with the Melbourne Cup holiday, and the Queen’s Birthday holiday.

But heck, who’s going to knock back an extra day off each year? We’re not.

Even so, it got us thinking. Can Grand Finals of the past give us any clue about the direction of the market in the future?

It’s nonsense, but for fun, let’s take a look anyway…

We’ll be honest. We didn’t analyse every Grand Final. There have been 117 of them in total, stretching back to 1898.

Instead, we checked out the stock market performance following the appearance of the teams represented in this year’s AFL Grand Final, the Western Bulldogs and the Sydney Swans.

That made it easier. To date, the Western Bulldogs (previously, Footscray), have only ever won one AFL/VFL Grand Final, in 1954.

The Sydney Swans (previously, South Melbourne), have a marginally better record, with five AFL/VFL Grand Final wins, in 1909, 1918, 1933, 2005, and 2012.

So, how do the numbers stack up? And what will our stock market forecast for the year be, depending on the victor? More below…

Bulldogs versus Swans

First, let’s take the Western Bulldogs. Its first, last, and only Premiership was in 1954. If it wins the Grand Final tomorrow, that will have been a long time ‘between drinks’.

But, looking at the performance of the All Ordinaries index after the Footscray win, we’d wager that investors should cheer on the doggies with a hearty roar.

Check out the chart below:

Source: Bloomberg
Click to enlarge

From 1954 to 1964, the All Ordinaries gained 120%, or 8.3% annualised. That’s a handsome return. For investors starved of big gains in recent years, most would likely take that.

So, we’ll cheer on the Bulldogs tomorrow, right? Not so fast. Let’s check out the market record following a Swans win in the past.

Unfortunately, our data for the All Ordinaries only goes back to 1935, which makes it impossible for us to track the Aussie market’s performance after most Swans wins.

In which case, for those early-century victories, we’ll check out the performance of the Dow Jones Industrial Average instead. Here’s the chart with the respective 10-year returns for each win:

Source: Bloomberg
Click to enlarge

In short, it’s a mixed bag. The results were as follows:

  • 1909–1919: 11.9% gain (1.1% annualised)
  • 1918–1928: 180.3% gain (10.9% annualised)
  • 1933–1943: 48.7% gain (4% annualised)

The overall average is an 80.3% gain. Not bad. But not quite as good as the Doggies. But we haven’t finished. Let’s look at the two most recent Swans’ wins. And for this, we can use the Aussie market for our ‘in-depth’ analysis [reader’s voice: surely you mean superficial and pointless analysis].

Check out this chart:

Source: Bloomberg
Click to enlarge

The results are:

  • 2005–2015: 10.2% (0.97% annualised)
  • 2012–Today: 24.1% (5.5% annualised)

Add these numbers to the previous Swans numbers, and the overall average is…55%.

That falls well short of the market’s performance following a Bulldogs win.

So, we only have one thing to say. And even for fear of alienating our loyal fan base of Sydney Swans supporters, we can only do one thing in the interests of investors everywhere…

We’re cheering on the Western Bulldogs to victory in tomorrow’s AFL Grand Final.


Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

Money Morning Australia is published by Fat Tail Investment Research, an independent financial publisher based in Melbourne, Australia. As an Australian financial services license holder we are subject to the regulations and laws of Corporations Act and Financial Services Act.

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