Apple and the Magazine Cover Indicator

Savvy financial trend-spotter Barry Ritholtz rightly points out that using a single cover article as a contrarian company trading indicator (e.g., “Sell Apple, they made the cover of Time!”) is generally misguided. After all, he argues, which one of the many following Apple covers  would you trade off? Instead, he focuses on macro trends and when those hit the cover (e.g., “Buy real estate now!”) then that is contrarian.

I don’t disagree with Barry, but I would refine things and say that even for macro trends trade covers are not useful contrarian market indicators of anything. Basically, it’s the big five: Time, BusinessWeek, Newsweek, Fortune, and Forbes.

[via Barry and Kuo Design]

Related posts:

  1. Magazine Covers from the Future
  2. Google’s Double-Cover Weekend
  3. More Fuel for the “Apple Buys Tivo” Fire
  4. Yi-Tan: Why Apple?
  5. The Bear Case for Apple

Comments

  1. Paul, all this tells me in MSM journalists focus on tools they use – Mac, PCs, Google and think the whole world – traders, salespeople, accountants must be just as dependent.
    I am constantly amazed at how little coverage enterprise tech gets in MSM even though it is 10X consumer tech spend…as I wrote here – Is the media biased
    http://dealarchitect.typepad.com/deal_architect/2006/03/is_the_media_bi.html

  2. Tigger says:

    I can hardly read any of those magazines. For financial information, nothing approaches the Economist.

  3. JohnD says:

    Victor Niederhoffer writes:
    “[W]e studied every company featured on the cover of Forbes from 1997 to the present. The results show that companies perform about 5 percentage points worse than the market in the month after making the cover of Forbes, and in line with the market over the subsequent five months.
    The results for the one-month period appear to be rather unlikely to have occurred by chance variation alone — say one in 20. Our study thus supports the theory that companies perform worse than the market in the month after appearing on the cover of Forbes.”
    source: http://www.dailyspeculations.com/about%20us/archives/archieve/The%20Speculator%20–%20On%20Wall%20Street,%20pride%20signals%20a%20fall%20-%20MSN%20Money.htm