Joseph Hogue on the magazine cover curse

A much less technical sign is in the overall bullishness of investors and what’s been called the Cover Curse.  Just last week, both Barron’s and The Economist published covers trumpeting the new bull market but not all are cheering.  These displays of optimism from the media have more often than not previewed a change in the market. 

Like when Time covered the ‘Secrets of the New Silicon Valley’ and ‘GetRich.com’ September 1999…just four months before the dot-com bubble peak.  Or when BusinessWeek called for ‘The Death of Equities’ in August 1979, just before the 80s boom that doubled stock prices.  In fact, in a study of 50 magazine covers back 25 years, researchers have found that this level of media optimism or negativity is a contrarian indicator with a 68% success rate.  That means, if you were to bet against the cover’s thesis, you could have called a market change 7-out-of-10 times.

~ Joseph Hogue, Bow Tie Index, March 21, 2024