Just in Time to Come Crashing Down.

NORMALLY it is considered an honor to be selected to grace the cover of a weekly newsmagazine. If, however, your metier happens to be business or finance or economics, the last place you want to be is on the cover of Time magazine.

Call it the curse of the magazine covers. There is an entire body of work devoted to analyzing the information on magazine covers. The bottom line? By the time a person or a phenomenon acquires magazine-cover status, the news is, as they say, already "in the market."

What, then, are we to make of Jeff Bezos' designation as Time magazine' s Man (oops! Person) of the Year? The 35-year-old CEO of Amazon.com Inc. is the fourth youngest individual ever to be given that distinction by the editors at Time.

Surely no one will quibble with Time's choice in honoring someone who has been at the forefront of the Internet revolution. That five-year-old Amazon.com hasn't earned a penny yet, nor is it projected to until 2001 or 2002, hasn't stopped Amazon's stock from returning 83 percent this year.

But if history is any guide, bad times may be in store for Amazon.

Magazine covers "reflect the extent to which the bullish, or bearish, news is in the public domain and has been acted upon," says Paul McCrae Montgomery, a money manager at Legg Mason Wood Walker Inc. in Newport News, Va, who has studied magazine covers going back to 1923. "By the time something's on the cover of Time, the story is widely shared."

Unlike Business Week and Barron's, which "give some good contrarian signals but also emit a lot of noise because they cover business every week," Time doesn't venture into the world of finance for its cover story that often, Montgomery says. When it does, investors should take note. Montgomery's comprehensive study has found that the market goes in the direction of the cover for anywhere from one week to two months and is 60 to 65 percent reliable.

One year later, the market has gone in the exact opposite direction as that suggested by the cover more than 85 percent of the time, Montgomery says.

"Can GM Survive?" on Time's cover Nov. 9, 1992, arrived when the stock of the No. 1 U.S. auto manufacturer was hovering near $25 a share. One year later, General Motors' stock was up 52 percent. Attempting to redeem itself, Time went back to the drawing board and produced "Detroit Shifting into High Gear" in December 1993.

Just about that time, GM stock shifted into reverse. One year after the bullish magazine cover, GM was trading below $30 again.

Montgomery noted two other Time classics that ran within a week either side of the 1929 crash. One featured Samuel Insull, the British-born American public utilities magnate; the other profiled Ivar Kreuger, the match king. Kreuger was tried three times (and acquitted) for fraud, violation of federal bankruptcy laws and embezzlement before fleeing the country. Insull shot himself.

Time magazine is not alone in penning big bloopers. The editors of the Economist went out of their way in a recent edition to apologize for some of their blunders this year in a piece entitled "We woz wrong."

First among the cover stories that didn't turn out the way they predicted was the March 6 cover, "Drowning in Oil," predicting $5-a-barrel crude. That was right before crude oil prices took off in earnest. The price of West Texas intermediate averaged $12.25 a barrel in the first two months of 1999, compared with an average price of $25.30 in November and the first 20 days of December.

The Economist is no different than other forecasters when it comes to being victimized by one-way-itis: It went down, so it will continue to go down. Who can forget the Wall Street Journal's currency outlook on the Monday after the dollar slumped to an all-time low of 79.75 yen in April 1995? Every analyst predicted that the dollar could only go lower. It didn't.

The Economist editors were hardly contrite .about their view of the U.S. as a "bubble economy" with a bubble stock market, another eye-catching cover. They hold out hope that they may yet be proved right in their forecast.

The good news for the Economist this time around is that Time is on their side.

Caroline Baum is a columnist for Bloomberg News.