BusinessWeek and other magazines have famously been attacked for the magazine cover curse—the idea, true or false, that magazine covers are a contrarian indicator. I’ve never believed this, based on my read of history. (The most cogent commentator on the magazine cover indicator is Barry Ritholtz. See here, for example).
Now Paul Krugman just appeared on the cover of Newsweek. Krugman writes on his blog:
I’ve long been a believer in the magazine cover indicator: when you see a corporate chieftain on the cover of a glossy magazine, short the stock. Or as I once put it (I’d actually forgotten I’d said that), “Whom the Gods would destroy, they first put on the cover of Business Week.”
There’s even empirical evidence supporting the proposition that celebrity ruins the performance of previously good chief executives.
Presumably the same effect applies to, say, economists.
You have been warned.
But here’s my question: What would be the empirical test of the cover curse applied to Paul Krugman?