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For the 20-year period ending in 2007, the Los Angeles Lakers’ N.B.A. championship record did a surprisingly good job of reflecting the stock market. … “An investor who put down $1,000 into the Nasdaq at the start of 1987 and stayed fully invested through 2007 would have ended up with $7,604. But an investor who bought the Nasdaq in years the Lakers lost and stayed in cash when the Lakers won would have finished with $21,189.” … the “Laker Indicator” is a perfect illustration of the dangers of assuming causality where only correlation exists: “But what if instead of the Lakers, we substituted put-call ratio or a bulls-vs.-bears indicator. A 20-year stellar track investing record like the Laker indicator would sound like a sure thing.
