Tag Archives: The Economist indicator

The world (of investing) according to Dante

(originally written Oct 21, 2011.  Part of Great Upload of 2013.)

It seems like the financial markets will have an “upwards bias” for the next few months, despite the circling-the-drain quality of the macroeconomic picture, which inspired this magazine cover from the Oct 1 issue of The Economist magazine.

20111001_CNA400[1]

If there’s anything I’ve learned over my years watching stocks (and, to be perfectly honest, there isn’t  ;) )  it’s to do the opposite of what The Economist says on its cover, a phenomenon known as the magazine cover indicator:

  • you’d’ve tripled your money in Ford in about two years by buying them after the July 2009 “Detroitosaurus Rex” issue
  • a couple months prior to that, the cover story “The Jobs Crisis” coincided with the bottom of the stock markets
  • of course, their timing is occasionally off; they did an oil-barrel cover in May 2008, and the price increased several percent into July before plummeting.

Continue reading