The April 2, 2016 edition of Barron’s includes a piece by Randall W. Forsyth, “Markets: What Everyone Knows That Isn’t So” and it includes some great examples of well- accepted notions not working. One of the best measures of what is well-accepted is…magazine covers! Mr. Forsyth writes:
“Once again, magazine covers gave clues to the contrarians. As Paul Macrae Montgomery pointed out many times in this space, when magazine editors catch on to something or somebody, it has long been digested and discounted by the markets. The magazine cover is a sign that some tide is about to crest or to rise.”
Perhaps one day someone will figure out how to measure this phenomenon using tweets or likes. Until then, we’ll go with paper.