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 had run its course in the market.

As a result of this research, I have decided to develop a portfolio of stocks based on using those three magazine’s covers as a contrary indicator. I also track this portfolio on StockPickr. This week’s results:

Forbes.com - Forbes Magazine Table Of Contents
Money For The Masses
Larry Light
Branch-heavy BofA leads rivals in retail deposits (also overall deposits), ATMs and card balances, which reap fees and interest.

Contrarian take: Stay out of financials, especially BofA. But you knew that already.

Risk returns - with a vengeance

For years big players ignored obvious dangers and reaped rich rewards. Now they are paying for their recklessness, and so is everybody else.  (more)

Contrarian take: Long everything. Risk premia, we hardly knew ye.

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 had run its course in the market.

As a result of this research, I have decided to develop a portfolio of stocks based on using those three magazine’s covers as a contrary indicator. I also track this portfolio on StockPickr. This week’s results:

Business Week
Markets In Turmoil
By rushing into the mortgage business big-time, homebuilders helped fuel the housing crisis. Now they’re hurting—and so is Wall Street

Contrary indicator: Buy Homebuilders. 

Fortune: Going Nuclear

The industry is gearing up to build its first new plants in decades. But are we comfortable with that? Join Fortune’s David Whitford on a road trip into America’s nuclear future.  (more)

Contrary Indicator: Sell TXU, Will Uranium Price Top?

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, I have decided to develop a portfolio of stocks based on using those three magazine’s covers as a contrary indicator. I also track this portfolio on StockPickr. This week’s results:

Business Week
Broken China
Beijing can’t clean up the environment, rein in stock speculation, or police its companies. Why the mainland’s problems could keep it from becoming the next superpower

Contrary Pick: Long China. Perhaps that is why China Life (LFC) made the Large Cap Watch List (Track at Marketocracy).

Fortune: How Gates conquered China

Or is it the other way around? On the road to Beijing with Bill Gates, who threw his business model out the window.

Plus, “The Greatest Economic Boom Ever!”

Contrary Picks: Short exposure to the US Economy, Microsoft (MSFT - Annual Report).

There has not been a new issue of Forbes since my last 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.

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:

International Business News : Business News, Technology Industry News

The Real Cost Of Offshoring
U.S. data show that moving jobs overseas hasn’t hurt the economy. Here’s why those stats are wrong

Contrary Pick: Hmm. Is this headline negative about offshoring or the US economy? I’m going with offshoring and saying the contrary pick is to buy the offshore firms like Cognizant (CTSH), Infosys (INFY) and Wipro (WIT).
Forbes and Fortune, being bi-weeklies, were not updated this week.

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:

Business Week: International Business News : Business News, Technology Industry News
3M’s Innovation Crisis
Delve into IN5, our supplement devoted to innovation. This issue’s theme: Managing the yin and yang of efficiency and creativity — a delicate balance illustrated by one of the great innovators of American business

Contrarian Take: Bullish on 3M (First bullish pick)

Fortune: The hottest investor in America

Fortune’s Shawn Tully peers deep inside the brain of Carl Icahn, who now portrays himself as a billionaire Robin Hood, hounding CEOs and enriching shareholders to the tune of $50 billion. (more)

Contrarian Take: Uncertain (no company mentioned.) Possibly bearish on Icahn’s current/pending ventures

Forbes:
Special Report: Decoding Your DNA Destiny

Super-cheap genetic scanning is set to jolt medicine, offering patients new insights–and painful choices.Contrarian Take: Uncertain. Possibly bearish on DNA testing companies such as Orchid, Life Technologies (LTI) or Lifecodes.

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

“Manage” us? Puh-leeze …The baby-boomers’ kids are marching into the workplace, and look out: This crop of twentysomethings really is different. A field guide to Generation Y.

Contrary Pick: None.

Special Report: The Investment Guide

Our semiannual guide to stocks, bonds, taxes real estate and retirement.

Contrary Pick: None

Extreme Investing: Inside Colombia
An improbable journey from crime capital to investment hot spot. Can this boom last?

Contrary Pick: Bearish on Colombia (This meets the study’s version of a Category 2 positive article). The closest ETF is probably GML (Emerging Latin America.)