By now, everybody knows how the Business Week ‘Death Of Equities’ Cover in the early 80′s marked the beginning of the most powerful 20 year equity bull market in history. Since then it’s been fun to play the ‘spot the contrarian indicator cover’ game. Look further down the right sidebar for examples of classic top of the RE bubble covers, in the US and Vancouver. The above illustration is from a very cute analysis of cartoons of bulls and bears on Barron’s covers over the last 2 years, as contrarian indicators, from Serge Farra, etf-corner.com, 31 Oct 2010.
This recent Time magazine cover is emotionally complex and doesn’t easily act as a predictor either way. But still, perhaps that sad fence predicts a mild bounce in US RE (though we believe the ultimate US RE lows are still further ahead).
Actually, the “Death of Equities” magazine cover was in 1974…
Actually, it was from 1979 [August 1979].
So, I should have said ‘VERY early 80′s’…
Forom a music perspective 1979 is indeed an honorary member of the ’80s.
hahaha. very nice.
Although…
The problem is that an increasing number of market participants are playing the market from a contrarian’s point of view nowadays and the MSM knows it. The fact that the “magazine cover” indicator is being quoted on blogs like this just reinforces this point. It is safe to say that the Georgia Straight’s Nov 2009 “Real Estate Liftoff” cover did not coincide with a market top.
No, not exactly, but, looking back from 2015-2020, I suspect you’ll see that the Georgia Straight cover was close enough to the market top… as close as the Business Week cover was to the bottom in equities in the early 80′s.
BTW, much ‘contrarian’ thinking nowadays isn’t such.
Contrarians were buying gold in 2000 and selling US RE in 2005.
Nowadays, the ONLY vehicle that is at comparable extremes is Vancouver RE (seriously!).
The general stock market looks toppy, too, but nowhere near as extreme as Vanc RE.
I remember looking at Bus Week/Time covers from April and thinking exactly the same thing about Apple shares, which did in fact sell off in May along with the rest of the market. Had the “powers that be” allowed the natural forces of gravity to take effect without the unprecedented levels of intervention and/or manipulation (call it what you want), I think things would have wound up looking radically different (and we certainly wouldn’t be having this conversation). As both you and I know, the markets have rebounded sharply since the May correction as central banks and govt’s around the world continue to ratchet up efforts to inflate their way out of all their problems. Ultimately, this is going to cause all sorts of huge problems, but in the short to medium term, these moves have effectively lit a massive fire under the prices of a variety of different assets (of which Vanc RE makes up only a small subset). So, what all this boils down to is whether or not TPTB have the stones to do the right thing and take the punch bowl away before it is too late. For the time being, I am not willing to make that bet (nor am I willing to load up on all the free money currently being waved in front of my face).