How Fortune Magazine Proves that the Stock Market is Due for a Correction

Okay, I'm calling it. Today. Mark my word, May 4, 2007 as I write these words.

The stock market has topped. The high point for the Dow Jones index today was $13,284. Mark it right there, it will stand for a while.

I have been surprised at how far the market has come up in recent years. Judging by the data, it should not be where it is. Investors are looking at world events, including a federal budget nearing meltdown due to the deficit, military adventurism bogging us down, oil prices going up, and the dollar sinking steadily against the Euro. Don't even get me started on the imploding housing market. How a sane investor looks at that picture of the world and sees conditions for a bull market is as staggering as when the Dot Coms with no product, no revenue, and assets consisting of a few laptops and a foosball table could be valued higher than GE.

So, the conditions are ripe for a correction. But conditions have been ripe for months, about a year in fact. How do I know today is the top? I got a glimpse of the cover story on Fortune Magazine today. The editors of Fortune tell us that Business is Back! That's truly a sign that the market has topped.

Magazines have always been a sign that the market is overbought and due for a fall. I'm sure if Fortune Magazine was publishing in 1929, they would have been touting the stock market in the days leading up to Black Friday, the stock market crash that started the Great Depression.

Some of the greatest hits:

Fortune Magazine name Enron America's "Most Innovative Company" for six years in a row, up until 2001 when the company crashed. What they didn't realize at the time was that Enron's only innovations were in accounting fraud.

In October 1999, "Dow 36000" by James K. Glassman was published that attempted to argue that the stock market was undervalued. Glassman claimed that the Dow, worth $10,729 when the book came out was less than a third of what it should have been. Two years later, instead of going to $36,000; the Dow dropped to $9,075 and another year brought it down to $8,397!

Time Magazine named Jeff Bezos "Person of the Year" in their December 27, 1999 issue for his stewardship of Amazon.com. On December 27, 1999 Amazon closed at $76.12. Twelve months later, the stock was only worth $15.56. Another twelve months, in December 2001, Amazon was a lowly $10.60!

In 2005, Fortune Magazine had a cover trumpeting the "Real Estate Gold Rush" showing off flippers, speculators, and all those people who have gotten their financial butt handed to them the past two years. True, they were a bit early on this one. New house markets chugged along for a few more months, but it was a great signal to get out of housing, if you were paying attention!

I'm not any sort of financial expert or professional, so please don't listen to any advice I give. But, the state of the market today is starting to freak me out, and Fortune Magazine sealed the deal!