by Bob Stokes
Updated: January 27, 2017
[Editor's Note: The text version of the story is below.]
As 2016 was wrapping up, a discussion on National Public Radio turned to the emergence of brand names as forms of wealth, like stocks and bonds.
For example, the name "Trump" on a building means increased value.
We see the development as a bull market phenomenon, and took notice back in April 2000. Then, our Elliott Wave Financial Forecast said:
Another indication that a historic extreme in brand awareness has reached a zenith is that in recent months, even individuals have become brands. A number of them, including Dick Clark, Donna Karan, Tommy Hilfiger, Martha Stewart and C. Everett Koop, have become publicly traded companies. The effort to literally buy heroes continues to spread.
As you know, that historic extreme in brand awareness was followed by a bear market that shaved 38% off of the Dow Industrials.
Fast forward to today.
Take a look at this chart and commentary from the January 2017 Financial Forecast:
Now, at the far edge of the Great Peaking Process, Weight Watchers' Oprah-induced yo-yo ride shows that the effort continues to "literally buy" bull market heroes. But the chart shows that Weight Watchers stock price is actually diminishing with Oprah's weight, regardless of short term emotional bursts. The share price is down 60% from its November 2015 high. Ironically, the slimmer Oprah gets, and presumably the more enriched her life becomes, the lower Weight Watchers shares go.
Since our January Financial Forecast published, Weight Watchers shares are still trading in the same ballpark, just modestly higher.
In the meantime (CNBC, Jan. 26):
Oprah Winfrey is joining forces with Kraft Heinz to develop a new line of healthy food products.
It'll be interesting to see how the share price of the Kraft Heinz Company will perform in the months ahead.
Extremes in the "equitizations of individuals" is not a precise market indicator, but combined with other indicators we're watching, we see a compelling market story unfolding.The market's Elliott wave pattern alone is sending a message that now is the time to position yourself for what's just ahead.