Their research examined Business Week, Fortune, and Forbes, and found a correlation between the cover of the publication and the performance of a stock.
In addition, the study examined how covers can predict when the overall market would change. (See the examples below.)
This is true of individual stocks as well. I'm sure you remember what happened to Amazon.com (AMZN) after Jeff Bezos was named Time Magazine's "Person of the Year" in December 1999... The stock traded at $115 before the cover ran; less than a year later, it would collapse some 95%.
Business Week's August 13, 1979 “The Death of Equities” cover claimed investors — burned by years of bad returns in the 1970s — turned their back on stocks for good. That was just before the market launched into an 18-year rally.
"Renewed economic uncertainty is testing Americans’ generation-long love affair with the stock market,” it said.
“The notion that stocks tend to be safe and profitable investments over time, seems to have been dented in much the same way that a decline in home values and in job stability the last few years has altered Americans’ sense of financial security.”
Times' “Home Sweet Home” cover in June 2005 called the very top of the housing market.
Newsweek's April 2010 cover declared “America's Back!” right before the Dow plunged from 11,200 to about 9,500.
Here's the September 1998 Time cover asking, "Is the Boom Over?" — before the Internet bubble even started to inflate...
Dozens of covers have been directly linked to changing the course of market direction:
In the March/April 2007 Financial Analysts Journal, Arnold, Earl and North take the issue head-on. They collect 20 years of headlines from Business Week, Fortune and Forbes and classify them as positive, negative or neutral.
Their statistical tests indicate that positive cover stories typically signal the end of superior performance and that negative headlines typically signal the end of poor performance. However, the evidence does not strongly suggest significant reversal or momentum when factors such as company size are also considered.