“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:
• 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