In August of 1979, Business Week had a cover story titled "The Death Of Equities". This, of course, immediately preceded the economic policies of the Reagan Revolution which served as catalyst to begin the longest bull market run in history. This is the all time classic example of contrarian thinking. When the mainstream media is confident enough to throw it on the cover, you better be heading the other direction as the party is likely over. You don't want to be skinny dipping when the tide goes out.
Potentially, we may have found ourselves revisiting history and it may be time to apply the contrary opinion technique once again. Recently, The Economist posted on the cover a barrel of oil, and it quickly reminded me about the Newsweek story. The explosion, no pun intended, of oil pricing at the end of last week was based on nothing in the way of fundamental changes and looks like a parabolic top to me, perhaps led by some serious short covering. Maybe I need to re-read "How To Make Money In Stocks" by William O'Neil again, but I would be playing this oil with extreme caution.
In August of 1979, Business Week had a cover story titled "The Death Of Equities". This, of course, immediately preceded the economic policies of the Reagan Revolution which served as catalyst to begin the longest bull market run in history. This is the all time classic example of contrarian thinking. When the mainstream media is confident enough to throw it on the cover, you better be heading the other direction as the party is likely over. You don't want to be skinny dipping when the tide goes out.
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