Abby Cohen: ‘Just calm down. This is not 1987‘

Discussion in 'Wall St. News' started by makloda, Mar 16, 2007.

  1. I sincerely hope we crash ~35%. Just to pull the mask off of these fraud analysts like her:
    FT Alphaville, UK - Mar 7, 2007

    Goldman’s Cohen: ‘Just calm down. This is not 1987′

    The recent market wobble has simply enhanced the attractiveness of leading US equities, Goldman Sachs strategist Abby Cohen declared on Wednesday. And anyone who tries to draw parallels between the current process of de-risking and the ugly events of October 1987 should look at the facts.

    The ‘87 crash was caused by portfolio insurance, which was found to be structurally faulty. It sought to minimise investors’ losses by automatically reallocating assets when markets fell, but because prices gapped the system failed — resulting in computer-driven orders to sell equities at ever-lower prices.

    The current episode of market volatility is still underway and it is too early to carry out a full review of precisely what happened, Cohen says, but she does think its is a good moment to review the likely fundamental backdrop and therefore the attractiveness of equities.

    Cohen’s conclusions:

    * No changes to Goldman’s baseline forecasts. “These already reflect a notable deceleration in economic and profit growth in 2007, but there is no recession on the horizon.”
    * Valuation support is intact for US equities. “Our estimated fair value for year-end 2007 remains 1550, suggesting that the S&P 500 is now about 11% under priced…The strength of US corporate balance sheets, especially among the companies in the S&P 500, and strong ROEs, should also offer some ballast in a rocky market environment. We assume that margins will move lower in many
    industries this year, but from record-high levels to still-high levels.”
    * GS forecast has long presumed a deceleration in economic growth this year. “Importantly, core inflation is not expected to rise dramatically.”

    So it’s official then. Whatever Alan Greenspan thinks, the panic’s over. For now.

  2. She gives a a whole new meaning to the term "Bull Dyke"..
  3. Why is she a "fraud". Just because her researched opinion/guess disagrees with yours?

  4. Hell yeah, I want the prez of GS selling Apples on the street.

  5. jem


    I would say everyone is a fraud who gives opinions without making money on their trading.

    Consequently, I respect your opinion (pabst) and Bill Gross' opinion - although not necessarily in that order. However, the problem with Gross and other traders' opinions is I am never quite sure when they are just talking their book.
  6. I guess I agree with her more or less, but I'm no Cohen fan. It's amazing how someone still has clout after making 1 lucky prediction 20 years ago...followed by a huge string of bad calls.

  7. cstfx


    This is especially true for the Gross crew. For the past 3 years, every time he got on TV he was calling for the end of rate hikes, first at 3%, then 3 1/2%, then 4%, etc. It became so obvious that all he was trying to do was jawbone the price of bonds higher because he had such a large inventory of them. This was the guy who was a star when the bond rates dropped to 3.7% because he was long, but, to me, lost credibility during the rate hikes. This guy was only concerned with his portfolio.
  8. Have you noticed? The shills come out whenever there is a decline of a few percent? It's because they all know the entire market is a rigged crock of crap, built on rhetoric and leveraged/irresponsible credit.

    They don't DARE allow a decline for fear it will all come tumbling down.

    If our politicians weren't so larcenous, they might have learned a lesson from the Romans....
  9. If I could wager money on what she's doing with HER OWN MONEY (as in personal money, not OPM, which is what leads to such total crap these people spew), I'd bet money she's mainly not in equities and probably very short quite a few.
  10. "Hell yeah, I want the prez of GS selling Apples on the street.


    me too fukn scum bags!
    #10     Mar 16, 2007