Kass: My Super Bowl Indicator Says These Stocks Could Fumble, While These Score
On Sunday, one of the grandest sporting events of the year will take place: Super Bowl LIX.
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.
This year, for example, we see a striking change from last year: Automobile ads only total two spots and mobile services (Verizon VZ and T-Mobile TMUS — both of which appeared last year) are abandoning Super Bowl advertisements this year. So are entertainment and large-cap technology (Alphabet GOOGL, Microsoft MSFT and Snapchat SNAP). Yet consumer products companies dominate, with 60% of all advertising spots. (I remain short a number of consumer-related names including Winnebego WGO and Figs FIGS.) Also, for the third year in a row, Apple AAPL is the halftime sponsor (I remain short).
If you're skeptical of this strategy, know this: 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.
Twenty-four 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, autobytel.com. 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 (30-second spot):
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!)
2024: $7,000.000
2025: $7.000,000 (10 30-second spots went for $8 million!)
Here is a complete list of 2025 Super Bowl advertisers. Super Bowl Commercials Lineup 2025: Here's The Full List Of Ads
In total there are 55 separate ads this year representing 50 different companies (some have multiple commercials).
For the third time since 2013 PepsiCo PEP is not sponsoring The Half Time Show — Apple AAPL is taking its place as they have since 2022.
Reviewing Super Bowl Advertisers of the Recent Past
Now let's look back at some commercial highlights from the Big Game in recent years
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 and Pepsi 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 PEP 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 hand, auto stocks are underrepresented vis-a-vis prior Super Bowls. They proved to be great buys.
2022's Super Bowl Advertisers: The Same Old, Same Old (Except for FTX and Crypto.com!)
There were roughly 40 companies that purchased commercial time to advertise in 2002'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, Booking.com and Expedia EXPE and so on — nothing new on the horizon, except...
There were two conspicuous and new entrants that are forking up the big bucks — both in the cryptocurrency field:
Cryptocurrency Exchange FTX Joins Super Bowl for First Time
Two years ago I wrote that cryptocurrency is here to stay. With Crypto.com 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.
Crypto.com 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 Crypto.com 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. Crypto.com 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, in 2022 I warned about celebrity endorsements:
Oct 03, 2022 ' 08:30 AM EDT DOUG KASS
Beware of Celebrity Endorsements of Stocks and Other Asset Classes
I had previously highlighted the absurdity of Matt Damon's Super Bowl (ad) sponsorship of crypto.com in Barron's earlier in the year and Kim Kardashian's entry into the private equity field in Barron's last month (Randy Forsyth's Up and Down Wall Street column):
Housing Bubble and Kim Kardashian: More Troubling News for Markets by Randall W. Forsyth Follow Updated Sept. 9, 2022 1:31 pm ET/ Original Sept. 9, 2022 10:26 am ET
Can there be a better sign of a market top than when celebrities pile into it? Especially celebs whose main talent is to appeal to the public's tastes, or lack thereof.
While they might be acutely attuned to what's happening in fashion, music, or the movies, they can be late in latching onto financial trends to which their sole connection is an insatiable desire to wring as much money as possible from the zeitgeist.
All of which is brought to mind by news that Kim Kardashian is launching a new private-equity venture. Truth be told, I don't know what she or the rest of her reality show family is famous for, other than for being famous. But Kim has leveraged her millions of followers on social media to become a huge entrepreneur, with interests ranging from women's undergarments to faux meat. That indeed is a talent not to be discounted.
Her entry into private equity recalls other celebrities' forays into financial spheres just ahead of those markets' top ticks. Most recently, all manner of celebs plunged into cryptocurrencies, most notably actor Matt Damon, who touted Crypto.com in a now infamous Super Bowl ad in which he intoned how "fortune favors the brave."
Doug Kass, the head of Seabreeze Partners-who flagged the prevalence of cryptocurrency ads at the time-further pointed out in an email this past week how other worthies, from rapper 50 Cent to quarterback Aaron Rodgers to New York City Reality star Kim Kardashian and former Carlyle Group investor Jay Sammons have launched SKKY Partners, a private-equity firm.
Private equity hasn't suffered big losses. But, according to a Sept. 8 note from Citi Research's quantitative global macro strategy group, private asset prices tend to lag those of the publicly traded markets, which are quoted second by second on screens. Weakness in public equity markets portend lower private-asset valuations, according to the report. Kim's entrance into the rarefied world of private equity may be about as propitiously timed as Barbra Streisand's furious pursuit of initial public offerings at the height of dotcom mania in 1999. (Babs told Fortune back then that she had quadrupled her money in America Online shares, but averred that she didn't pretend to be a maven "like the guy in Barron's last week who can analyze all the companies and so forth.")
If private markets do get marked down one to two quarters after the public ones, as Citi says they have historically, that points to similar trouble for the former. I wouldn't shed any tears for Kim K. or any other A-lister able to get past the velvet ropes into private equity funds.
Bottom Line
An analysis of 2025 Super Bowl advertisements again shows a larger-than-normal concentration of consumer products commercials — with about 60% of the ads consumer-related. (I remain short a number of consumer products companies, including Pepsi and Coca-Cola)).
But the real story is that automobile manufacturers are only in two spots (Jeep and Ram), while mobile services (Verizon VZ and T-Mobile TMUS (both of which appeared last year), entertainment and large-cap technology (Alphabet GOOGL, Microsoft MSFT and Snapchat SNAP) are abandoning Super Bowl advertisements in 2025. The Indicator suggests these stocks might be considered for purchase.
For the third year in a row, Apple is replacing PepsiCo as the half-time show sponsor, we might again consider a cautious view towards the company. (I remain short AAPL.)
Here is my favorite commercial this year! When Sally Met Hellmann's :30 - Super Bowl Commercial 2025
Enjoy the game!!
This article commentary was orginally posted in Doug Kass's Daily Diary on the TheStreet Pro.
At the time of publication, Kass was short AAPL (S), KO (S) PEP (S), WGO (S), FIGS (S).
BY Doug Kass · Feb 7, 2025, 5:00 PM EST