Best of the Week
Most Popular
1.Oil Wars 2016 - US vs Russia vs Saudi Arabia vs Iran - Nadeem_Walayat
2.Crude Oil Price Crash Triggering Global Instability, Trend Forecast 2016 - Nadeem_Walayat
3.Stock Market Crash - Last Week was The 2nd and Final Warning... - Clive_Maund
4.Stock Market Crash Apocalypse or Bull Market Severe Correction? - Nadeem_Walayat
5.TShipping Said to Have Ceased… Is the Worldwide Economy Grinding to a Halt? - Jeff_Berwick
6.Crude Oil Price Crash Catastrophe, Independant Scotland Literally Begging to Rejoin the UK - Nadeem_Walayat
7.Summers: Global Economy Can't Withstand Four 2016 Fed Hikes - Bloomberg
8.Gold And Silver: New World Order: Public Be Damned, Preferably Dead - Michael_Noonan
9.Rigged U.S. Ttreasury Bond Market Double Barreled Hidden Q.E. To Infinity - Jim_Willie_CB
10.Major Stocks Bear Market Awakening - Zeal_LLC
Last 5 days
UK Interest Rates, Economy Forecasts 2016 and 2017 - Video - 10th Feb 16
World Markets Are in Sync - 10th Feb 16
If You Miss Buying Gold – You Will Regret, it Later - 10th Feb 16
The Fed Doesn't have a Clue! - 10th Feb 16
How Far Can Gold Price Go? - 10th Feb 16
It's Stock Market Panic Time! - 9th Feb 16
Gold Stocks Picks for Patient Pickers - 9th Feb 16
Oil Price Collapse U.S. Recession Odds 2016 - 9th Feb 16
Preparing for Crisis - It's About Risk Mitigation and Capital Preservation - 9th Feb 16
Top Silver Mining CEO: Don't Laugh, We Could See Silver $100+ - 8th Feb 16
Gold, Investment Leadership Changes Permanent? - 8th Feb 16
Stock Market Panic Decline Begins... - 8th Feb 16
How to Save Money By Growing Your Own Homegrown Tomatoes Indoors From Seeds - 8th Feb 16
US Economy Slides One Step Further Towards A Recession - 8th Feb 16
Gold Bear Market Bottom : Mr. Bear has left the PM Sector for Greener Pastures - 8th Feb 16
Stock Market At Important Support - 8th Feb 16
David Cameron Humiliated in Poland Over Refusal to Stop Taking UK Benefits, BrExit or Super State? - 8th Feb 16
Why Crude Oil Prices Could Continue FALLING From Here - 7th Feb 16
Stock Market S&P, NAS Best, Most Reliable Answers Come From The Market And You - 7th Feb 16
Stocks Bear Market Continues - 7th Feb 16
Silver COT Paving Way for Sustained Upside Breakout Sharp Rally - 7th Feb 16
US Dollar Double Top, Gold Prospects Brightening Rapidly - 7th Feb 16
Gold And Silver - Is A Bottom In? Nothing Confirmed - 7th Feb 16
Gold Stocks Something has Changed - 6th Feb 16
UK Interest Rates, Economy GDP Forecasts 2016 and 2017 - 6th Feb 16
Gold Price, Mining Stocks Rocket Higher - 5th Feb 16
Crude Oil Price Bottoms and Blues - 5th Feb 16
Gold and Silver: Ripe for a Recovery! China May well Change the Game - 5th Feb 16
How Pension Plans are Responding to Financial Repression - 5th Feb 16
Senior Gold Producer Goldcorp Takes Large Stake in Nevada's Gold Standard Ventures - 5th Feb 16
Tips for Smart Oil and Natural Gas Investing 2016 - 5th Feb 16
Another Corporate Giant Is Leaving the U.S. – What This Means for You - 4th Feb 16
TPP is Economic Warfare, Trade Can Make Everyone Worse Off / Governments are Stupid - 4th Feb 16
Gold and Stock Markets Inflection Points Galore - 4th Feb 16
Putin Cries Dyadya (Uncle), Is Saudi Arabia Listening? - 4th Feb 16
Gold Price Golden Bottom? Video - 4th Feb 16
Look North for Value-Priced Growth in Healthcare Biotech Stocks - 4th Feb 16 - TLSReport
BrExit EU Referendum - Britain's FINAL Chance for Freedom From Emerging European Superstate - 4th Feb 16
HUI Now Confirming Gold Price Move Higher - 4th Feb 16
Crude Oil Price Forecast 2016 As Good As It Gets - 4th Feb 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Global Financial Crisis 2016

Stock Market Crash Alert

Stock-Markets / Financial Crash Apr 24, 2013 - 05:24 PM GMT

By: Money_Morning

Stock-Markets

Ben Gersten writes: If you're contrarian, then Barron's latest "Big Money" poll and its magazine cover just gave you reasons to be on the lookout for a stock market crash.

The semiannual poll of professional investors found that 74% of money managers are bullish or very bullish about the prospects for U.S. stocks - an all-time high for Big Money, going back more than 20 years.


Barron's drives the point home with its over-the-top cover titled "Dow 16,000!"

But not everyone feels as confident as these polled investors - especially since the issue follows 2013's worst weekly performance for stocks.

"Rule o' Thumb: When the cover of a major financial magazine features a cartoon of a bull leaping through the air on a pogo stick, it's probably about time to cash in the chips," mutual fund owner John Hussman wrote on his Hussman Funds website.

Dow 16,000, or a Stock Market Crash?
In its more than 20-year history, Barron's Big Money poll has a history of making overly bullish calls at precisely the wrong time.

"Still Bullish! (Dow 13,000)" was published May 1, 2000, with the Dow Jones Industrial Average at 10,733.91. The Dow had already fallen almost 1,000 points from its high in January 2000 and would go on to lose about 40% of its value in the 2000-2002 bear market. The S&P 500 and the Nasdaq performed much worse.

"Dow 14,000?" was published in Barron's May 2, 2007, with the Dow at 13,264.62. The Dow did actually hit 14,000 by October 2007.

In that year's second Big Money poll, released in November, the headline read, "The Party's Not Over," and bulls outnumbered bears 2-to-1.

But as we know, the market had already peaked and would go on to lose over half its value in the 2007-2009 bear market.

This graphic from Hussman sums up the "Barron's Cover Jinx."


Think of this as the investing equivalent of the "Madden Curse," in which the NFL player on the cover of the Madden video game every year suffers a serious injury or dramatically underperforms.

Magazine Covers: Stock Market Crash Indicator?
Hussman's not the only market analyst who likes to use magazine covers as potential contrarian indicators.

Money Morning Chief Investment Strategist Keith Fitz-Gerald pointed out last year, "Magazine covers help me to latch on to important market shifts and trends that others either miss or simply don't see coming."

Looking at these bold headline predictions from the past helps you see why.

"The Death of Equities" adorned the cover of Business Week's Aug. 13, 1979 edition - and the headline could hardly have been more wrong.

The Dow shot up 1,153.76% over the next 20 years. The S&P 500 tacked on 1,135.97% and the tech-heavy Nasdaq rose 1,705.9% over the same time period. The investors who went to the sidelines got left behind.

Then in 1999, Time magazine named Amazon CEO Jeff Bezos "Man of The Year."

Within 24 months, the Internet bubble had burst and shares of Amazon (Nasdaq: AMZN) closed below $6, shedding 94.32% from a previous high of $105.06.

In 2003, after the price of a barrel of oil had fallen to between $20 and $30 a barrel, The Economist ran the headline "The End of the Oil Age."

You guessed it: Oil took off on a triple-digit run, finally peaking in 2008 at $141.71 a barrel.

While investors shouldn't base decisions purely on magazine headlines, they do help give a sense of when markets may be too euphoric or fearful.

History has shown us that much.

Source :http://moneymorning.com/2013/04/23/contrarian-alert-is-this-investing-jinx-signaling-a-stock-market-crash/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History