Magazine Cover Indicator Update
Conventional wisdom holds that magazine cover stories are contrarian indicators - by the time a company’s success or failure reaches the cover page of a major publication the story is so well known as to be completely reflected in the stock price. Therefore, all good news is priced in and the stock can only underperform or all bad news is priced in and the stock can only outperform.
While simplistic, the magazine cover indicator now has the support of recent academic research. This research did find that cover story headlines on Business Week, Fortune and Forbes tended to indicate that the mood (bullish or bearish) of the story was about to change in the market.
As a result of this research, we have decided to develop a portfolio of stocks based on using those three magazine’s covers as a contrary indicator. We also track this portfolio on StockPickr. This week’s results:
FORTUNE 500, news, interviews - FORTUNE Magazine on CNNMoney
Who business is betting on
Who business is betting onIn a wide-open race, candidates are scrambling to get CEO endorsements. Our exclusive Fortune survey goes behind the scenes from Wall Street to Silicon Valley to find surprising alliances and discover how they were forged.
Contrary Pick: No stock pick, but Hillary’s supporters may need to watch out.
Business Week offers its annual retirement guide. No contrary pick for them, either.
