New York Magazine’s cover: “Things are better than they seem. Honest.”

Some of you are now thinking: “Uh-oh, another happy mag cover. That spells trouble for the stock market.”

Let’s review if this meets our requirements for a major warning, a contrary indicator sufficient to halt the rising equity markets.  As it turns out, the short answer is no.

Here are the details:

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If you recall 2 weeks ago, we discussed what the premise of the magazine cover is:

1. Mainstream — not business — publication

2. Well understood concept that is reaching a climax

3. Asset price gains

Rule #1 was easily met. New York magazine is a non-biz, mainstream publication.

Second, while the stock market has rallied hard from March 2009 — up 82% or so — this cover is not cheerleading that rally. So we haven’t really met the subject of rule #3.

But the main reason this fails as a magazine cover contrary indicator, is our rule number 2. We haven’t had a run of optimistic news. QE2 would not be necessary if everything was hunky-dory. Things have been mediocre at best.

The psychological angle of the cover indicator is simply this: Some well understood concept is climaxing just as it makes the front of a mainstream media outlet. That is not met here.

Indeed, the entire concept behind this issue of NYMag is “Hey Buddy! It aint THAT bad! We know things are tough — try to look at the bright side of life.

Compare that with “Why we are gaga over Real Estate.” Hence, we do not have a contrary magazine cover indicator at work here.

You may return to your prior tasks . . .

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Look on the Bright Side
The Happiness List
Mr. Sunshine: Jimmy Fallon

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Previously:
Uh-Oh: Barron’s Cover “Bye Bye Bear” (October 31st, 2010)

Tale Of Home Prices Told Through Covers Of TIME (September 14th, 2010)

Category: Contrary Indicators, Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

11 Responses to “Contrary Indicator: New York Mag’s Optimism Cover?”

  1. chartist says:

    Yes, but according to Bernie Schaeffer of Schaeffer’s investment research, there’s a 30 day lag, give or take, between the cover and the beginning of the turn.

  2. The Housing cover was practically to the day of the peak in sales volume !
    (Prices peaked a few Qs later)

  3. machinehead says:

    In light of its aggressive, mindless shallowness, New York magazine probably deserves a mulligan — to qualify by meeting any two of the three rules.

    In other words, these journos are so D-U-M dumb that they must axiomatically be wrong.

    If you leap head-first off the Empire State Building, you may experience the rapturous illusion of rising rapidly. So far so good!

  4. BR,

    I appreciate your strict interpretation, though..

    Jimmy Fallon, called out as “Mr. Sunshine”, pictured blowing bubble(s), on the Cover (?)

    given the lead times involved, they, probably, approved this at the same BenBer was, publicly, unfurling his QE2-Playbook..

    and, w/these:
    http://quotes.ino.com/chart/?s=CME_INX
    http://quotes.ino.com/chart/index.html?s=NYBOT_CR&t=&a=&w=&v=d12

    might have ‘top-ticked’ them, both..

    http://www.thefreedictionary.com/publicly

    if, only, BenBer would deign to disclose the FedRes’ ‘Balance Sheet’, in similar fashion, then things may be looking up (at least, for the long-run..)

    http://legal-dictionary.thefreedictionary.com/deign

  5. edit:

    “..at the same (time) BenBer was..” from 08:24, above

  6. tradeking13 says:

    I find it hilarious that a bubble is being blown by Jimmy Fallon while we are being told that things are looking up. Was this done intentionally?

  7. Mike in Nola says:

    tradeking13: When I saw that, I thought that maybe someone was sneaking in a little sarcasm. Without the new bubbles, in China’s property market or the US stock market, there really isn’t much to be optimistic about. Except maybe those who are good traders.

  8. ashpelham2 says:

    The top level owners of crap publications like this are business-people. Business people need business/sales, and telling people that everything is good, great, normal, will spur on those sales.

    I love it that so many of my countrymen simply don’t see or understand this concept. It speaks well to my plans to take over the Earth.

  9. machinehead says:

    You got it, ashpelham2. New York magazine is targeted to the aspirational upper middle class, who gaze with envy on the Hamptons super rich while trying to tailgate their tastes in autos, art, fashion and interior design.

    In flogging the upscale merchandise which graces its glossy pages, it’s essential for New York to cajole its worried subscribers to hit the stores before the masses catch on and drive up prices.

  10. [...] Did last week’s NY Magazine cover on optimism flash the magazine cover indicator?  (Big Picture) [...]

  11. beaufou says:

    @machinehead
    http://www.theonion.com/video/in-the-know-are-americas-rich-falling-behind-the-s,14165/

    a little dated but your comment made me think of it.