Archive for the "Cover to Cover" category

The market crash of `29 didn’t make the cover of Time in 1929 or at the start of the Great Depression in 1930 when the market dropped 25%. Even with the market down 43% in 1931, Time didn’t devote a single cover to the market crash. Today’s popular publications take a different approach to covering financial affairs. From gloomy forecasts to excited predictions, every movement in the market seems to make its way onto magazine covers.

In Cover to Cover, we’ll explore the contradictions often found on these covers. They are another example of how the media makes it difficult for investors to behave rationally, especially when they encourage short-term action over long-term planning. Eventually, you’ll see a pattern emerge. We hope that as the pattern becomes clear, you’ll feel more confident turning away from the newsstand.

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Oil Shock> “In the early 1970s a fourfold rise in the price of oil almost brought the world to a standstill. …oil prices have quadrupled again, briefly soaring to a peak of just over $135 a barrel. But, so far, this has been a slow-motion oil shock. If the Arab oil-weapon felt like a hammer-blow, this time stagnant oil output and growing emerging-market demand have squeezed the oil market like a vice. For almost five years a growing world shrugged it off. Only now is it recoiling in pain.”—The Economist, May 29, 2008

As of December 22, 2008, “U.S. crude fell $2.45 to settle at $39.91a barrel on the first weekday of trading for the February 2009 contract.”