Stock Market Beat Magazine Cover Indicator
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Created by Trent
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Date updated:08-04-2007

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.

symbol name last price % change open
  • +
  • MMM
    3m Company
  • $77.20
  • +2.37%
  • $75.93

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

People owning MMM also tend to own: AAADPAVPBACBRK-BBUDCSCO

TheStreet.com Rating: B What is this?

  • +
  • INFY
    Infosys Technolog
  • $49.12
  • +2.78%
  • $48.43

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).

People owning INFY also tend to own: AAPLACNADSKANSSCDNSCTSHEBAY

TheStreet.com Rating: B What is this?

  • +
  • CTSH
    Cognizant Technol
  • $44.20
  • 0.00%
  • $N/A

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).

People owning CTSH also tend to own: DILGDIHBIOKIMSLWSPARBRCM

TheStreet.com Rating: B+ What is this?

  • +
  • WIT
    Wipro Ltd.
  • $18.77
  • +4.05%
  • $18.36

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).

People owning WIT also tend to own: ADMMLIMSFTTXNNTQLGCACAS

TheStreet.com Rating: B What is this?

  • +
  • LFC
    China Life Ins Co
  • $75.55
  • +3.64%
  • $74.61

Business Week (7/23/07) says China is Broken. That's enough for a long position.

People owning LFC also tend to own: CHLCOSTDHSGIGMIGTMIKRCII

TheStreet.com Rating: No Rating What is this?

  • +
  • NVR
    N V R L P
  • $685.50
  • +1.79%
  • $676.04

Business Week: Bonfire of the Builders

People owning NVR also tend to own: BRK-ACMEGOOGSEBWPOWTMACN

TheStreet.com Rating: C What is this?

 

Start Price

Return Value

Start Date
MMM 88.43 -12.70% Jun 2nd
INFY 49.72 -1.21% Jun 9th
CTSH 75.47 -41.43% Jun 9th
WIT 16.09 +16.66% Jun 9th
LFC 59.71 +26.53% Jul 15th
NVR 599.00 +14.44% Aug 4th

Average return:

 -7.69%

Success rate:

 50%

Hated Stocks:
EBAY 34.20 -31.96% May 12th
SPY 150.86 -27.37% May 12th
GML 68.67 +13.69% May 18th
LTI 1.02 0.00% Jun 2nd
TTH 40.56 -41.27% Jun 16th

Tracking Started: 05-12-2007

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