Remembering One of Wall Street's Great Thinkers: Ritholtz Chart

Paul Macrae Montgomery, best known as the originator of the "Time Magazine Cover Indicator," and for being the creator of the "Hemline Indicator of the Stock Market," died this weekend. He will be missed. 

Paul Macrae Montgomery, best known as the originator of the Time Magazine Cover Indicator, and for being the creator of the Hemline Indicator of the Stock Market, died this weekend. He was 72.

The Daily Press of Newport News, Va. Wrote this:

He was a nationally-renowned forecaster of stock and bond markets who chose to stay put in his home town of Newport News, a serious student of statistics whose sense of the ridiculous led to his lighthearted discovery of the women's hemlines indicator of stock prices.

I was fortunate to have had several conversations with Paul over the years. He was humble and soft spoken but he took delight in puncturing the bad theories that pass for analysis on Wall Street.

Long before behavioral economics became popular, Montgomery argued that standard economic theories "overlooked the human factor in markets."

The Time Magazine Cover Indicator -- it has been broadened to include any national non-business magazines and newspapers -- can operate as excellent indicators to oppose conventional wisdom.

Universal Economics, his research publication, remains active and offers several of his reports for downloading. Montgomery also had been a regular contributor on television, in the New York Times, Barrons and Grant's Interest Rate Observer.

Here is Paul's famous Hemline Indicator of the Stock Market:


He will be missed.

Corrects spelling of Montgomery in second paragraph.

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    Barry L Ritholtz at

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