Investment Opportunities

Bikinis and Bolsas: The Sports Illustrated Swimsuit Indicator

Editor’s Note: In light of the frigid temperatures in the Northeast, for this week’s chart we turn our sights toward sunnier – and skimpier – days. Below you’ll find an abridged version of a piece written by Offshore Strategist Eric Fry, suggesting that Sports Illustrated swimsuit models can have a positive effect on their respective economies.


Rachel Gearhart, Managing Editor

Fifteen years ago, I discovered an improbable connection between the nationality of the model appearing on each cover of the Sports Illustrated swimsuit issue and the subsequent direction of share prices on the national stock exchange of her home country.

After quite a bit of research and number-crunching, I came up with this brand-new indicator… and published my findings in a February 2000 issue of Grant’s Investor.

When a bikini-clad supermodel from a foreign country graces the cover of Sports Illustrated, her appearance tends to kick off a [four-year] bull run in the stock market of her native land…

In 1978, Brazil’s Maria João appeared on the cover of SI’s swimsuit issue. Four years later, her country’s stock market had soared an astounding 465%.

Next up, in 1986, the stunning Australian model Elle Macpherson made her first of several cover appearances. Over the ensuing four years, the Australian Stock Exchange’s 50 Leaders Index rose 91%…

When the Swedish beauty Vendela Kirsebom graced the cover of the magazine in 1993, the OMX-Stockholm index rose to the occasion by appreciating 263% over the next four years…

Perhaps these remarkably favorable results are no mere accident. After all, “what better way to strike patriotic fervor and self-confidence in the heart of a nation – and stimulate its economy – than by splashing one of its bathing beauties on the cover of Sports Illustrated?

If it is not already clear, dear reader, I devised this indicator for its amusement value, not its investment value. But here’s the crazy thing: This indicator has amassed a track record that is as stunning as any swimsuit cover model.

As the table below shows, from 2000 to 2009, the Sports Illustrated Cover Indicator produced six straight winners, including a dazzling 406% gain off the back of Petra Němcová’s dazzling appearance on the 2003 cover.

Not until last year did the SI Cover Indicator’s recent winning streak come to an end. No one disputes the striking beauty of Russian model Irina Shayk. But her 2011 appearance on the Sports Illustrated cover kicked off a truly ugly four-year skid in the Russian stock market. Fortunately, losses like these are the exception.

On average, the foreign stock markets indicated by cover model appearances produced double the returns of the MSCI Index’s average returns during the identical time frames.

Which foreign bourse or bolsa should the globe-trotting philogynist now consider? Sports Illustrated is providing no answer. American models like Kate Upton and Hannah Miller have been grabbing the cover slot since 2011. So we’ll have to wait at least one more year for a new signal from the Sports Illustrated Cover Indicator.

Is this quirky indicator somewhat silly? Of course it is.

Is it entirely frivolous? Maybe not.

The selection of a cover model reflects a subtle cultural sensibility. We like to be with the winning team. And just maybe the fashion world has an innate sense for which country will be the next winning team.

Whatever the reason, the indicator seems to work.

Good investing,

Eric J. Fry

*The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of Wall Street analysts.

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