October 2009, in the depths of the bear market, TIME said we should stop investing retirement funds in equities.
The stock market went on to return 17% per year over the next decade.
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The mechanism is worth naming explicitly. Editorial decisions optimize for readership, and readership is maximized by confirming what the audience already believes. At market bottoms, fear is consensus. At tops, euphoria is consensus. So magazine covers are structurally lagging indicators — they capture peak sentiment, not forward-looking analysis.
The same pattern showed up with The Economist's "drowning in oil" cover in early 2020, right before supply constraints drove prices to multi-year highs. It's not that editors are bad at forecasting. It's that their incentive isn't to forecast — it's to resonate. And resonance means reflecting the existing narrative after it's already priced in.
The same pattern showed up with The Economist's "drowning in oil" cover in early 2020, right before supply constraints drove prices to multi-year highs. It's not that editors are bad at forecasting. It's that their incentive isn't to forecast — it's to resonate. And resonance means reflecting the existing narrative after it's already priced in.