Stock Market Beat Magazine Cover Indicator

Description:

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.

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Articles

5 Stocks Set to Soar on Bullish Earnings

05.21.12 | 11:23 AM

WINDERMERE, Fla. (Stockpickr) – Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a t...

5 Rocket Stocks Ready to Blast Off

05.21.12 | 10:52 AM

BALTIMORE (Stockpickr) -- Last week wasn’t exactly a good week to be a stock investor. The S&P 500 shed 4.3% between Monday’s open and Frid...

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