“We like steel. It’s not a well-liked sector, yet it has been doing very well over the past 12 months. I wouldn’t be shocked if money left the ‘hot’ areas like tech and social media and made its way to the more boring areas like steel.”
Who said it: Ryan Detrick, Senior Technical Strategist, Schaeffer’s Investment Research
In Context: There are several new TV series airing in the US depicting life in Silicon Valley ‘s technology hub, namely a comedy series called “Silicon Valley” on HBO (some episodes on YouTube), as well as “The Shark Tank” and “The Profit” on other channels. Could this trend signal that the current tech rally is about to deflate, asks a reporter for FoxBusiness who probed the idea that the launch of the TV series is an indicator, in the same way that the Magazine Cover Indicator (MCI) is significant. In other words, the tech rally led by Silicon Valley startups is about to decline now that Hollywood’s touting it. Ryan Detrick was quoted as a contrarian investor, although not necessarily a follower of the MCI. He’s more reliant on quantitative-analysis methods than that.
The MCI is a “somewhat irreverent” economic indicator, according to Wikipedia. The MCI idea is that cover stories in major business magazines, particularly BusinessWeek, Forbes, and Fortune in the United States is often a contrary indicator, that is, that is if a magazine says that xyz is big or the “most”, they are coming in late or they tend to get the big trends wrong. Your DealMarket Digest editor agrees with Wikipedia’s commentary on the MCI, “Although there are a number of examples where magazines have been wrong, even spectacularly wrong, there is a tendency to ignore all the times the covers are right.”
Where we found it: Fox Business