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Contrary Indicator: The Donald!

Posted By Barry Ritholtz On February 3, 2004 @ 1:06 pm In Finance,Media | Comments Disabled

Dorsey Wright Associates [1] has an interesting observation regarding the magazine indicator and the Donald:

“Donald Trump may well be a viable contrarian indicator!

As you are well aware, we look at magazine covers with a slant toward the contrary if possible. In other words, our approach is that when information trickles down to the mass media consumption level of the newsstands, you typically want to go the other way. The news is out, the cover is reflecting what has already happened.”

We noticed a striking similarity to Donald Trump-authored books and market tops:

· “Trump: The Art of the Deal” (released in January 1987),

· “Trump: Surviving at the Top” (released August 1990),

· “The America We Deserve” (released January 2000)

Note the dates of the Donald’s books and then consider the subsequent market behavior. Scary!

DWA continues: “But now to the present – Donald Trump is due to have another book published and released shortly after his reality show, “The Apprentice”, finishes up. Now get this, the title is supposed to be, “How to Get Rich: Lessons Learned from The Apprentice & Other Big Deals”! Does that smack of a market top?!?!? To boot, if you haven’t seen the show at all, the introduction of the participants is shown with a ticker tape running. Food for thought – or maybe, “The Donald Sentiment Indicator”. “

While I am not in full agreement with DWA’s magazine cover theory — One cannot help but laugh at the coincidence of the Donald’s book release schedule.

trump.bmp [2]

Good stuff, Tom!

Source: Dorsey Wright Associates [1]


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URLs in this post:

[1] Dorsey Wright Associates: http://www.dorseywright.com/

[2] Image: http://www.amazon.com/exec/obidos/ASIN/0446353256/ref=ase_thebigpictu09-20/002-2267231-0348809

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