By the time you make it to the cover, it may be too late.
An interesting item from Marc Andreessen’s blog:
Paper of the week, Bonus Edition: Business magazine covers as contrarian indicators
The basic point: Being featured on the cover of one of the Big 3 business magazines (Forbes, Fortune, BusinessWeek) may be a signal that the news on a particular company is changing. As the study’s authors put it:
“Statistical testing implied that positive stories generally indicate the end of superior performance and negative news generally indicates the end of poor performance.”
So it’s sort of like a more robust version of the Sports Illustrated cover jinx (which supposedly tanks the chances of players or teams that appear there). Some wags have sharpened up the business version of this to be more specific. E.g. some Silicon Valley journalists have taken it as a point of faith that by the time Forbes gets around to featuring a major technological trend on its cover they typically (a) get it wrong, (b) signal the end of the trend’s importance, or (c) both.
My favorite anecdotal example of the overall principle suggested by the paper referenced above is Home Depot back when Bob Nardelli still ran it. For a couple of years in there, Nardelli kept getting slagged despite his success in growing the company. And then for a while there was a rash of stories about how he had remade the place, how it ran like a top, et cetera. And then he got canned.
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