This Beats the "Business Week" Indicator
One of the beauties of working at a firm like Merrill Lynch for 18 years is that one gets "schooled" by some true masters of macro research: Bob Farrell, Chuck Clough, and Dick McCabe. Although each was different in their approach to the markets, they all shared a sense for the contrarian indicator. One of Bob's favorites was the "Business Week" Indicator. When something appeared on the cover of Business Week, Bob argued, it was time to invest in something else. We think we have found something that trumps the Business Week Indicator...well, at least for the current cycle.
It was pointed out to us yesterday that the publishers of the "Dummies" how-to books published in November a book called "Flipping Houses for Dummies". According to the Dummies.com website, this 384 page book with 25 chapters will allow one to "lay the foundation for successful flipping and bring home the bucks".
As mentioned, the book was published last November, and the S&P 500 Homebuilding Index is down about 13% from that point. For this cycle, the timing of this book's publication might top anything from Bob's Business Week Indicator.