“Americans seem to be falling in love with stocks again.”


That is the first sentence of a front page NYTimes article, titled As Worries Ebb, Small Investors Propel Markets.

The rest of the article is just as bullish:

“Millions of people all but abandoned the market after the 2008 financial crisis, but now individual investors are pouring more money than they have in years into stock mutual funds. The flood, prompted by fading economic threats and better news on housing and jobs, has helped propel the broad market to within striking distance of its highest nominal level ever.”

To be sure, there are some caveats throughout:

“While the rising market may lift the nation’s collective spirits, it will not necessarily restore everyone’s portfolios. In good times and bad, many individual investors tend to buy and sell at precisely the wrong moments. They dump stocks after the market falls and buy stocks after the market rises, the opposite of what investors aim to do.”

But overall, there is no escaping the sentiment of either the headline of that first sentence or the gist of the entire column. Stocks are back, baby! Now is the time to jump onboard.

I have been fairly selective as to what qualifies as a magazine cover indicator and what is merely media noise. Let us look at the details of this one:

1) A mainstream non-business publication;

2) Front page or cover story

3) About rallying asset class

4) With a decidely bullish tone to it

That is how I determine when the magazine cover has been initiated. I cannot think of any reason why this one does not qualify.

This chart accompanied the article:

A Steady Ascent

Source: NYT



Uh-Oh: Time Magazine on Housing (June 6, 2005) BEARISH
Uh-Oh: Facebook’s Zuckerberg is Time Man of the Year (December 17th, 2010) BEARISH
Uh-Oh: Gold on the Cover of NYT Magazine? (May 15th, 2011) BEARISH
NYT Sunday Business: Magazine Cover Indicator? (January 1, 2012) BULLISH
Barron’s Cover: Don’t Lose My Money (January 28th, 2012) BULLISH
Magazine Cover Indicator: New York “End of Wall Street” (February 6th, 2012) BULLISH

As Worries Ebb, Small Investors Propel Markets
NYT, January 25, 2013

Category: Contrary Indicators, Investing, Psychology

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.

29 Responses to “Uh-Oh: NYT’s Front Page Cover Indicator”

  1. chartist says:

    If I remember correctly, there’s often a 30 day lag from the publication date to the eventual market top.

  2. ToNYC says:

    Shouldn’t the ” A Steady Ascent” chart be underlayered by a QEx graph? It is another inflationary baseline creeper that bumps the spooz.

  3. Pantmaker says:

    I saw this NYT earlier today too and I think this is all positive news longer term. The next shake out will be so intense that we will finally get “the blood in the streets”, “no one wants stocks” sentiment that we need for the next long term buyable opportunity.

    This is the third time we have been sitting on this market perch since 2000. Think for a moment what was going on in the country the last time we were here…housing through the roof…cash in the bank…chicken in every pot…great jobs…China strong…Europe healthy…lower taxes…the list was robust.

    I keep hearing the ridiculous mantra parroted that everyone is “whole now” so no one has a reason to sell any longer. You kidding me…you think my parents six months away from retirement, battle weary from all of the Duncan YoYo loop-di-loop-around-the-world market bull crap and the nausea of realizing that the douche bag bail-out-the-banks politicians have intentionally robbed them of a decent market rate of return for safe money are going to pile their “side-line cash” into equities. Mmmmmmmmm….no.

    This belief we magically blast higher from here is crack smokin’ 101.

  4. ConscienceofaConservative says:

    Just read the Times article and it seems they offer the typical anecdote and Lipper flow data. I don’t buy it. First Zero Hedge points out this is no retail but institutional money. Second retail investors tend to be attracted to “cocktail story stocks” and these just don’t tell good stories lately(e.g. FaceBook & Apple), plus this class of investor has been burned way too many times in the past decade or two. Most people I come in contact with at work or outside have lost interest and believe its a rigged game. Outside of 401k money we’re not putting new money to work.

  5. Moss says:

    They even have a name for it. The Great Rotation.


    I also see Bridgewater (Dalio) is on board.

  6. Joe says:

    I dunno… This feels different. In 1999, I was told by a buddy that “Since the stock market is the same as a saving account…”. The magazine covers on the news stands at the time were part of that environment. I also remember the MSNBC program on real estate in the mid oughts with 15 pro real estate guests lined up against Doug Kass by himself. The implication was that he was pitiful and you didn’t join in, you could be too.
    I live with the guys at work who I got out of stocks in our 401 s in Feb 2008 who are still in the stable value fund earning somewhere around minus zero post inflation, not really comfortable with their returns, but not compelled enough to do something about it…
    This might be what it appears, a marker for the, or a top, but it is not one that is as representative of everybody on the same side of the boat as earlier ones were.

  7. Tim says:

    Two thousand on red….

  8. alanvw says:

    Anyone remember Bush 43 proposing that we privatize social security so that it can be ‘invested’ in equities? Seeing that come up again would truly signal the top on this thing

  9. Cooter says:

    It must be sweet making a living betting other people’s money based on magazine covers.

  10. bonzo says:

    I’ve been saying for years that neither late 2002, nor spring 2009, nor summer 2010, nor late summer 2011 was the end of the great bear market that started in 2000. There will be at least one more down phase before we get final capitulation, the small fry swear off the market for good, and stocks return to their rightful owners. Anyway, valuations now are lousy (looking at the long term, which is how stocks should always be looked at) and that is reason enough to get out, even if sentiment wasn’t getting euphoric.

  11. Cooter says:

    But in all seriousness, with the VIX at decade lows, why not buy some insurance and go long and hard on aggressive stock portfolio? Beats the alternative IMO…..

  12. BennyProfane says:

    The most interesting thing is that all of this is happening as the Apple bubble deflates, big time.

    Bottom line, though, is that this isn’t “Mom and Pop” or individual “investors”. Both have no money. Another big media myth perpetrated by the NYT, swallowed whole.

  13. Petey Wheatstraw says:

    Buy now, or be priced out FOREVER.

    Anybody wanna’ buy a nice 5,000 SF McMansion nestled on a postage stamp lot in the far reaches of Nowhereville? No money down, no proof of employment, and no formal ID needed. Just drop trou and sit on this blotter paper, and it’s ‘yours’.

    Now, I know this company that’s waaaaay undervalued. It’s a penny stock, now, but it’s gonna’ take off. Hell — I wouldn’t be surprised if it was trading at $45 by this time, next year. Everybody knows that stocks NEVER go down.

    Rinse and repeat. Your mileage might vary.

  14. TacomaHighlands says:

    Oooo…..yeah…so you know if the MSM is publishing it…well, it MUST be true! Also this that you keep hearing about is true too! Barry, I picked this up at the local Home & Garden show today for you and Mrs. BP for your side yard. Hope you like it!

  15. Tony61 says:

    “End of Wall Street” should be a BULLISH indicator, no? Typo?


    BR: Doh! Cut & Paste error — I’ll fix.

  16. mathman says:


    The Illusion of Money and the End of Nature
    In order to understand why the world is locked into a blind stampede over a cliff, you have to understand how the world runs, i.e. its socio-economic system. A large percentage of the population doesn’t understand that the world is ruled by multinational corporations or that the citizenry are simply disposable pawns with no voice in their fate.

    (and further down)

    When you have such an immovable supersystem of puppet governments and marauding transnational corporations running the show, radical movements questioning and trying to change the status quo are easily co-opted or crushed, a recent example being the Occupy movement. In a world where extinction of the human species is guaranteed by climate chaos and the myriad of other crises created by industrial capitalism, a slow and incremental regimen of change is not what is needed to stave off collapse. Unfortunately, the entrenched interests of the financial elite and the nation-states they control won’t allow for any sort of abrupt and profound transformation. As Professor Julian Cribb has correctly identified, a culture of money worship and the mass delusion of money’s illusory value is at the heart of the global crisis. The high priests of money are protected at the expense of all else:

    (it concludes)

    Without changing the socio-economic system under which we live, no real solutions for the multiple civilization-ending crises we face can be properly addressed. There is an expiration date for this unending conversion of the natural world into fake symbols of wealth hoarded and squandered by a greedy few…

  17. BusSchDean says:

    mathman: You describe a pretty dire situation, probably correctly so. Flat income, fewer evident promising career paths for the mid-career professionals, and discouraging thoughts of retirement make decisions about investing particularly important but the “pawns” have “no voice in their fate,” particularly their financial fate.

    The whole Ackman v. Herbalife issue actually illustrates a bit of the underside of the economy (full disclosure — I am involved in this issue). Many people out there looking for something to give them a financial bump. The young lady that cuts my hair has a relative pressure her to switch energy providers (apparently part of a multilevel marketing company) – just one of may “opportunities” she hears about given her profession, my students trying to sell Cutco knives, etc.

  18. catman says:

    Are we there yet?

  19. J. Francis says:

    I think it would be a bit overwrought to think that mom and pop are diving headlong into this market. Sure, they may be somewhat interested in story stocks a la Facebook and Apple but the key here is that after 4-5 years of economic chaos, layoffs, kids moving back in, 401k carnage/volatility people have a little bit of coin to put back in that Schwab account. I just don’t see any giddiness amongst average people for stocks, it’s more of a, ‘hey we should start putting a little more dough away after being so slack these past few years’, rather than a, ‘ omg betty told me about stock x last week we should buy and get rich’, kinda phenomemon.

    Given how the huge outflows from stocks/mutual funds the past 4 years even a little net input seems like a big deal just because the recent frame of reference was so bad.

  20. Concerned Neighbour says:

    It all depends on whether you think retail matters. It may be that central banks and their sundry algorithms have such control over things that there will only be one direction in the stock market for the foreseeable future, and of course that is up. If the prime mover (central banks) of the stock market doesn’t care about stock fundamentals or inflation – and I would argue they don’t – present day AMZN could look downright cheap in a couple years.

    Of course, I would like an opportunity to invest again in my lifetime under conditions where market prices aren’t so horribly distorted by central banks. Maybe when bubble Ben leaves, but I’m sure they’ll just replace him with Yellen or some other printer.

  21. mad97123 says:

    BR gets picked-up here. http://www.themarketperspective.com/2013/01/up-up-and-away.html

    And this in the previous day’s write-up fits with market being and analogy to the 70s.

    “Bottom Line

    There are ample indications that the stock market is making another high at least similar to the high of September and April of 2012. The Summation Index has entered territory where other highs have occurred since 2009. Daily summation index has made a new high. Daily new highs new lows has made an ominous divergent lower high. The SPX price is at the top of its uptrending channel. Gold miners continue trending down.

    Cycle wise the markets are a near perfect 40 years from the 1973 high. We are

    13 years from the year 200 high.

    5 years from the 2008 low

    Politically we have the Congress and the House of Representatives on a collision course just as we did then as welll. Then Nixon was promsing a way out of the Viet Nam War. Now we are told a troop exit from Afghanistan lies just ahead. Now we have a dead amabassador and bodyguards in Libya and dead hostages in the Algerian oil fields. (The point here is that ememies were then and now emboldened.) Nixon felt empowerd with his big victory just as Barack Obama feels the same way now. Nixon then and Obama now were and are operating in a What Could Go Wrong Mode. Both replaced numerous Cabinet Officials. Each gladly takes credit then and now for a recovering stock market. Then the market had revisited its all time high just over 1,000 on the Dow. Now we have numerous all time highs over the last year and agan this week. The rule of alternation has reversed the party positions of the President and the House. Past eriods of stagnation have exhibited three big drops in the market, since year 2000 we have had two. A third drop lies ahead it is just a matter of when. See the parallels?

    If you think I am exaggerating the parallel, consider the article on page one of the WSJ today. France does not have the airlift capability to even move 80 troops and their equipment to Africa. Canada and the UK offered three planes two of which broke down in route. I expect the opposition in Mali reads the WSJ as well.

    I was half way through broker school in January 1973. And trust me no one thought the markets were about to tank 50%. I have laid out the indicators and the parallels to the best of my ability . “

  22. mad97123 says:

    It would seem a good part of the January stock inflows would be related to the special dividends pay at year-end.
    I have no idea what the actual amount turned out to be, but the $ 25 billion estimate below would be a nice chunk of change for the already bullish holders to reinvest right back into the market. Real buying for sure, but one-time.

    The Huffington Post, citing data from Markit (mentioned above), suggests American companies have paid out $24.2 billion in early or special dividends in 2012

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  24. toddie.g says:

    I read that article last week, and then I read the comments section. The commentary was overall very negative and skeptical. No evidence at all that anybody “was falling in love with stocks all over again.”

    I viewed that as the contrary indicator, as opposed to the article. This is nothing like the attitude in bull markets. People got killed in stocks too many times. So, now I actually do believe that the market is in
    excellent condition. Those comments reinforced my belief.

  25. I am unaware of the “Comments indicator,” but I have seen a variety of pushback whenever I flip bullish or bearish. You seem to be cherry picking, ignoring an established indicator that disagrees with your view in order to select anecdotal evidence that confirms your prior belief

    Beware of confirmation bias . . .

  26. rd says:

    Another indicator of the exuberance stage of a bull market – pundits announcing that lackluster earnings are a reason why the stock market will go up over the next year or two: