WANTED: August 13, 1979 Business Week
I am looking for a good (relatively clean) copy of the August 13, 1979 Business Week magazine. If anyone has located one of these, please contact me with sales information.
Here's why: Hanging on my office walls are several infamous magazine covers from days gone by. On the flip side, I tape a chart of the Dow over the three years following publication date. The exercise is rather instructive.
I've discussed this many times over the years: Most comprehensively, in the Contrary Indicators of 2000-03 Bear Market, more specifically in the The Magazine Cover indicator, and with actual examples in the Februrary 2004 Uh oh: Forbes Cover Screams "Tech is Back!" and Uh-Oh: Apple on the Cover of Fortune, as well as a rather frivolous but prescient political example Howard Dean and the magazine cover indicator.
What I am missing from my collection of magazines and/or covers is the August 13th, 1979 and Business Week Magazine's cover story featured "The Death of Equities". The cover is a photo of a downed paper airplane fashioned from a stock certificate. The sub-caption decries "How inflation is destroying the stock market."
The downed paper (stock certificate) airplane in the picture was actually surrounded by the crumpled remains of other "crashed" paper airplanes. An excerpt of the article reads:
Wall Street looks beyond stocks; Moving into options, futures, buying into insurance
The masses long ago switched from stocks to investments having higher yields and more protection from inflation. Now the pension funds--the market's last hope--have won permission to quit stocks and bonds for real estate, futures, gold, and even diamonds. The death of equities looks like an almost permanent condition--reversable someday, but not soon.
UPDATE: FEBRUARY 28, 2005 5:29 PM
Most of the full text of the article can be seen here:
Business Week's "The Death of Equities" Revisited
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» Time Cover: Soup Lines from The Big Picture
A few caveats with contrary indicators such as below: First, they are quite imprecise in terms of time. Recall the August 13, 1979 BusinessWeek Death of Equities cover -- it wasn't THE low, but it was 12 years into a Bear market, and a respectable entr... [Read More]
Tracked on Oct 8, 2008 1:44:20 PM
I have a copy of Fortune mag from late Aug-early Sept 98 with the (paraphrased) headline: "How to Prepare for the Coming Recession."
The SPX had just fallen the magic 20% (bear market signal) in the prior 5 weeks (LTCM collapse). The minute the issue hit the stands, the SPX rallied 10%, then fell to a marginal new low in early Oct prior to its blowoff 16-month rally.
Fortune was ultimately right, if a bit early. Anyone shorting the SPX after receiving the issue would have suffered a 60+% drawdown over the next 18 months. They would finally have broken even by 9/11/01, though they only had a day or two to cover before the market took off again.
The short position would finally begin making money in July '02 (for about two weeks), then again in Oct 02 (for another two weeks). Tough to make a living being right sometimes.
As an aside, I also have the Fortune cover from this past August which addressed the bursting of the housing bubble. They hedged a bit saying that it could run until Spring '05. If past is prologue, look for the housing bubble to re-inflate in a blowoff before taking on water sometime in '06-'07.
Posted by: copernicus | Feb 28, 2005 3:33:02 PM
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