Goldman strategist sees rising stocks

CBS MarketWatch ^ | July 21, 2002 | Goldman strategist sees rising stocks (Cohen Alert)

[StockAyatollah]

Goldman strategist sees rising stocks By August Cole, CBS.MarketWatch.com Last Update: 11:03 AM ET July 21, 2002

NEW YORK (CBS.MW) -- Goldman Sachs' top U.S. market strategist, a renowned bull, said Sunday that U.S. stocks are going to get back on their feet and head higher.

Abby Joseph Cohen said on CBS's "Face The Nation" that stock prices are set to go "higher, not lower." The comments were made on the heels of a week that saw the Dow Jones Industrial Average ($INDU: news, chart, profile) give up 7.6 percent and the Nasdaq Composite ($COMPQ: news, chart, profile) fall by 3.9 percent. See full story.

She also remarked that the tell-all period that has roiled Corporate America is nearing its end. "We're close" to the end of the corporate revelations, Cohen said.

To that end, she predicted, the upcoming Aug. 14 deadline for top company executives to verify their firms' books will be a positive for the markets.

Allen Sinai, chief global economist at Decision Economics and a guest on the Sunday-morning news program, commented that U.S. economic fundamentals and prospects are "the best in the world."

In April, Goldman's Cohen had said her 2002 target for the Dow ($INDU: news, chart, profile) was 11,300 and for the S&P 500 ($SPX: news, chart, profile) it was 1,300.

As of Friday, the Dow closed at 8,019. The Nasdaq closed at 1,219. The S&P 500 ended the day at 848.

[StockAyatollah]

If this airhead keeps predicting an upswing eventually we'll get it and she'll be proclaimed an expert once again. 11,300 Dow target? Maybe in 2010!

[Recovering_Democrat]

I'm buying all I can. These wusses who are selling out are panicking for no reason. Emotion is ruling the market, as in many sell-offs. I'm taking advantage. :)

[EVO X]

I'm buying all I can. These wusses who are selling out are panicking for no reason. Emotion is ruling the market, as in many sell-offs. I'm taking advantage. :)

You might be a bit quick to pounce. I was reading a Scott Burns article in todays paper on how stock options dilute shares and don't get reported as such.

[wardaddy]

Stocks will rise again no doubt. This market is overwhlemingly mass psychology driven at the moment. The fundamentals are not too shabby. I believe the bottom while not yet breached is nevertheless quite near......it's a process as they say. The big unknown are terrorist attacks. Another Sept. 11th and bam!...who knows.

[GregoryFul]

And it is a good time for the terrorists to attack too. To take advantage of a trend, as they did on 9/11. A Judo principle to propel the US into a headlong crash. The chances of an attack tomorrow morning are very high, I would think.

[arete]

Wall Street must be really scared to trot out Abby Cohen.

Same old crap -- "The fundaments are good. We see a recovery in the __________ (fill in the blank). Stocks always go up. Stay calm. We're near a bottom. Send us your hard earned money. Remember, it's for the children."

Richard W.

[Soren]

I've said this on about 50 threads, but it is worth repeating. The S&P 500 P/E is 34. The historical average is 15. The typical bear market trough tends to overshoot and go down to 8-10. If history is any guide, this market has another 50-70% to fall. (15/34=.44, or a 56% drop). These are facts. Whether history repeats or not, that is something each investor must decide for themself. If you think the bottom is near, you should be aware of how much this bottom will deviate from historical precedents.

[lawdude]

"I base this hunch on my E-Bay Auction offerings."

Certainly the guiding light in stock market analysis.

[Soren]

In this age of rah rah financial media, I find it useful to gather all the anecdotal info I can.

[Soren]

The chances of an attack tomorrow morning are very high, I would think.

Why waste their personnel when the markets are likely to fall anyway? In fact, it would probably be counter-productive because then the attack could be used as an excuse for the falling markets. Investors might be more tempted to hold on if they thought it was due to an attack, rather than because the market was falling apart for reasons they don't understand. If you look back at 9/11, the markets were falling apart during the preceding weeks. 9/11 gave everyone cover, and we saw everyone fess up to poor earnings and blame it on 9/11.

[Dog Gone]

She's correct in only one sense. There never has been a bear market that didn't end.

It's not ending this week.

[GregoryFul]

The Plunge Protction Team may be in business tomorrow, barring an attack, reducing or reversing the drop. There is a lot of momentum to the downside, but still many thinking that it is a good time to buy, and a lot on the short side who would cover rapidly, I think (let's find out who has been shorting this market). A positive tilt could bring us a sharp (bear market) recovery.

A second (third, forth?) attack tomorrow morning would take advantage of the huge negative momentum built up in the past three weeks, demonstrate that the US government has not done anything effective to deter the objectives and potentialities of the terrorists, and bring on political and economic chaos. Note that the slope of the DOW is very similar in September to that of the preceeding few weeks (10320 to 9605, 8/20 to 9/10; 9109 to 8019, 7/1 to 7/19).

If the planners believe that the market will continue to fall, as you think, they may wait for signs of a bottoming (Monday, 9/10 seemed to be a bottoming or reversal day). But weeks like last week, and days like Friday are rare, the odds are that this comming week will not be as bad, and may even be a reversal. We passed a technical trend line that could become a bounce, or a significant signal for a drop to 6500 or 5000 on the DOW.

All pure speculation, of course.

[rohry]

In April, Goldman's Cohen had said her 2002 target for the Dow ($INDU: news, chart, profile) was 11,300 and for the S&P 500 ($SPX: news, chart, profile) it was 1,300.

Last year she said the Dow was going to 12,200!

Abbey and "the Bat"...They'll keep trotting them out until the market's at zero. These two losers have been consistently wrong for almost three years. How come they still have jobs? Why haven't they been hauled in front of Congress like the WorldCom analyst who was recommending them all the way to the bottom?

[joesnuffy]

Peter Fisher..and his renouned band..Exchange Stabilization Fund with good ole "Easy Al" Greenspan on the drums..will have things well in hand...
What? you think..Money grows on trees? ..at least this kind does...crank up the presses.......HAHAHAHAHAHAHAHA

[DeaconBenjamin]

This fundamental is extremely shabby:

The National Association of Scholars (NAS) last week focused light on some of those ideas. In a survey of 401 college students conducted by Zogby International, the NAS found that 73 percent of students say their professors teach that "what is right and wrong depends on differences in individual values and cultural diversity." Only 25 percent said professors teach that "there are uniform standards of right and wrong by which everyone should be judged."

The result of such teaching is a skewed view of business priorities. When the poll asked students to rate the importance of various business practices, "corporate diversity" outpolled basic corporate honesty. Thirty-eight percent said "recruiting a diverse workforce in which women and minorities are advanced and promoted" was most important. Only 23 percent picked "providing clear and accurate business statements to stockholders and creditors." (Minimizing pollution and avoiding layoffs garnered 18 percent each.)

The entire article is at http://www.freerepublic.com/focus/news/717280/posts

[palmer]

Pinging your post #8, can't argue with those facts. I also mentioned on another thread that investors will deal with losses in typical stages although they will not all be in the same order. In denial they stay in the bear market. In anger they start to sell, call for Congress to skin some CEO's etc. In bargaining they will cut spending and perhaps sell their houses. Depression and acceptance will be healthy signs, but those seem to be a ways off.

Of course that doesn't help to predict the market, but may predict how it affects the rest of the economy.

[gaspar]

I'm sorry, but whoever wrote this about Cohen "the bull" is dead wrong. For more than two years Cohen has been urging caution. She really backed off tech stocks and had little good to say about the NASDAQ. Of course, she had little bad to say, but for those who followed her, her picks were invariably cautious and she led the flight to old line stocks. Now that she is upbeat, we can feel a little better because she is a very wise woman.

[shred]

On what do you base your P/E evaluation?

My numbers show that the trailing P/E of the S&P
excluding one time charges is about 18. With
interest rates this low, that's certainly within
historical norms.