George Bernard Shaw once wrote off golf as “typical capitalist lunacy.” While the Irish playwright’s snide affront was mere anti-bourgeois disdain, the fortunes of golf and the financial markets have been closely tied for over a century and grown even tighter in modern times.
In his book Bulls, Birdies, Bogeys & Bears Kevin Armstrong, the former chairman and CIO of ANZ Group’s Regional Investment Committee, tracks the historic connection between prize money on the PGA Tour and stock market returns. Armstrong found that the great games of golf and investing have the same ebb and flow.
Comparing a graph of the annual earnings of the PGA money list leader from the mid 1930s through to the present with the Dow Jones Industrial Average for the same time period, he was astonished to find they were practically mirror images. Even more amazingly, he found that the correlation didn't exist in other professional sports. The market synchronicity was unique to golf.
“The market is a wonderful and instant barometer of aggregate social mood, it seems golf is too,” explains Armstrong. While the relationship between the two games isn’t causal, Tiger Woods’ tournament wins don’t push up the indexes or vice versa, the tight relationship between big money golf and the investing world is nonetheless fascinating. Lets take a look at the coolest links.
Comparing a graph of the annual earnings of the PGA money list leader from the mid 1930s through to the present with the Dow Jones Industrial Average for the same time period, he was astonished to find they were practically mirror images. Even more amazingly, he found that the correlation didn't exist in other professional sports. The market synchronicity was unique to golf.
“The market is a wonderful and instant barometer of aggregate social mood, it seems golf is too,” explains Armstrong. While the relationship between the two games isn’t causal, Tiger Woods’ tournament wins don’t push up the indexes or vice versa, the tight relationship between big money golf and the investing world is nonetheless fascinating. Lets take a look at the coolest links.
Runyan away from Tiger
5’7 and 125 lbs soaking wet, Paul “Little Poison” Runyan may not have won any longest drive contests but he possessed a killer short game. The PGA's first money list topper since they started tracking the stat, Runyan earned $6767 in 1934. But what is truly striking is that had Little Poison taken his winnings and invested it all in the market, twenty years later, forty years later, and even into the 2000s his wealth would have grown to almost the exact amount that each year's leading money winner accumulated. Sixty-six years later it would equal Tiger Woods $9 million and change on-course haul from 2000.
Boom, Bust, and In the Hole!
TW posted his highest ever golf earnings tally in 2007, winning just shy of $11 million on tour. This zenith was reached right before the world market puttered off the cliff. In a Wall Street Journal story this past March titled “The Dow of Tiger Woods,” writer Matthew Futterman noted that the week Tiger Woods reclaimed the top spot in the World Golf Rankings by scoring his 77th career win at the Arnold Palmer Invitational, the DJIA closed at a new all-time high. The piece included a telling graph, mapping Tiger’s performance against the Dow Jones Industrial Average and noting the “eerie” correlation.
5’7 and 125 lbs soaking wet, Paul “Little Poison” Runyan may not have won any longest drive contests but he possessed a killer short game. The PGA's first money list topper since they started tracking the stat, Runyan earned $6767 in 1934. But what is truly striking is that had Little Poison taken his winnings and invested it all in the market, twenty years later, forty years later, and even into the 2000s his wealth would have grown to almost the exact amount that each year's leading money winner accumulated. Sixty-six years later it would equal Tiger Woods $9 million and change on-course haul from 2000.
Boom, Bust, and In the Hole!
TW posted his highest ever golf earnings tally in 2007, winning just shy of $11 million on tour. This zenith was reached right before the world market puttered off the cliff. In a Wall Street Journal story this past March titled “The Dow of Tiger Woods,” writer Matthew Futterman noted that the week Tiger Woods reclaimed the top spot in the World Golf Rankings by scoring his 77th career win at the Arnold Palmer Invitational, the DJIA closed at a new all-time high. The piece included a telling graph, mapping Tiger’s performance against the Dow Jones Industrial Average and noting the “eerie” correlation.
Ryder Cup Tell
With a few exceptions, the Ryder Cup—the biennial golf grudge match between the US and Europe that has transfixed fans since seed magnate Samuel Ryder paid London silversmiths Mappin & Webb to fashion a trophy for the event—has been consistently won by the side with the stronger stock market. While it's not rocket science why wealthier countries over time foster more elite athletes than poorer nations, what is amazing as Armstrong explores in his book is how closely correlated the relationship continues to be over the past 20 to 30 years when the matches themselves have been such nail biters.
*My above story originally ran in Golf Canada Magazine
With a few exceptions, the Ryder Cup—the biennial golf grudge match between the US and Europe that has transfixed fans since seed magnate Samuel Ryder paid London silversmiths Mappin & Webb to fashion a trophy for the event—has been consistently won by the side with the stronger stock market. While it's not rocket science why wealthier countries over time foster more elite athletes than poorer nations, what is amazing as Armstrong explores in his book is how closely correlated the relationship continues to be over the past 20 to 30 years when the matches themselves have been such nail biters.
*My above story originally ran in Golf Canada Magazine
RSS Feed