Two fairly recent cover stories show that Barron's really is telling you what’s already happened rather than what is likely to come along next. Their Sept. 3 issue (published Aug. 31) pictured an indestructible bull while noting that “most Wall Street strategists see stocks rising further from here.”
Were they prescient and providing traders with usable information? Barron's waited until stocks had risen by more than 10 percent in a three-month span before taking that bullish stance.
The cover of today’s Barron's (dated Oct. 29, published Oct. 27) shows the frustrated Bear from the Sept. 3 cover about to drop the bull off a roof. Barron’s take today? “Money managers turned surprisingly bearish in our latest BIG MONEY POLL. Skeptics predict stocks will drop 8% by June.”
What changed their opinion by 180 degrees in the intervening 56 days? The broad market, as measured by the S&P 500, rose briefly after the original bullish cover story before topping out on Sept. 17. Since then it’s dropped by 3.8 percent.
The total change in the index between bullish and bearish cover stories? A whopping 0.135 percent.
If you waited for the all-clear sign from Barron's, you missed the big run up from June to September. Those who get out now after reading the bearish comments will be selling nearly the worst levels of the past two months.
I love to read Barron's articles but would advise investing on fundamentals rather than whimsical backward-looking data.