Time Magazine - 25 Years of Contrary Opinion

In a nutshell, the Contrary Opinion Theory states that when an economic item appears on the front cover of Time Magazine, that trend is probably at its end. The reasons for that are explained in several books. The main source is Art of Contrary Thinking by Humphrey Neill ($9 on amazon).

Harry E, a long-term Spike Member sent me and Kerry a large pdf file where he assembled 30 financial-related Time covers, each with a caption showing what the market did 10 years later. His summary: "On average, had you invested $1,000 on the day these issues hit the stand, the investment would have been worth $2,850 ten years later (almost tripling in that time)"

I wanted to post his pdf here but could not import it into the blog. Also, 10 years is an eternityfor a trader. And so I spent a couple of hours today attaching thumbnails of those covers to the weekly charts. The results are shown below.

What can you do (other that enjoy it)? If you have access to Time files, you could check whether Harry's colection of economics and finance front covers is complete.

I look forward to hearing from you

Alexander Elder

You can see four panicky covers building a base for the 1974 historic stock market bottom

These covers nailed the 1974 bottom.

As the stock market stagnated in 1978 and 79, 'bad covers' proliferated. The market never had a serious decline afterwards.
The ax cover of 1981 may have seemed prescient as it was followed by a small bear market - but a year later the greatest bull market in history has erupted.
Two 'bad' covers just prior to the start of a great bull market.


In 1986 two 'bad' covers signalled the bottom of a reaction within a bull market

A scary cover nailed the start of a new bull market

As the bull market rolls along, 'bad' covers mark reaction lows

The covers are silent in bull markets, loud at reaction lows.

A timely cover, for a change. Even though the bear picture graces a reaction low, two years of a bear market still lie ahead.

Another timely cover, in May 2008. Has the Time gottten smart? Not necessarily. Remember, it usually takes several covers to nail a major bottom.

What's next?

First, to reward you for reading to the end, I offer to send you Harry's original pdf file - just email me.

Second, and more important, I am looking for a research collaborator to review Time and Newsweek covers for the past 35 years to validate this project.

Trade well!

Alexander Elder