Big Dawgs Drop Their Dogs: Growth Funds' Selling a Major Drag on Nasdaq (cont'd)

This is Part 2 of a two-part story. Please be sure to read Part 1.

Accountability Time

As with most investors, the fourth quarter was a difficult time for most of this column's sources. Some fared better amid the carnage, but many got the kind of report cards you would have been afraid to bring home as a kid. Having never had to forge my parents' signature in all my years of schooling (my older sister was much better at it), I can't imagine what it'd be like to get these kinds of grades. Then again, I suspect this is the first time many of these "gurus" got such blatantly failing marks.

In the spirit of brevity, I've left out all of the "bottom" calls from the fourth-quarter. Plus all of the "rewards outweigh the risks," especially as they applied to tech stocks, and all the "it's time to start accumulating" or "anticipation of the 'January effect' will boost stocks in December" calls.

Individually and cumulatively, anyone calling for any kind of fourth-quarter rally outside of energy and select value stocks got failing grades, including:

Jeffrey Applegate, chief investment strategist at Lehman Brothers on Oct. 2 and Nov. 7;

Abby Cohen, U.S. investment strategist, Goldman Sachs on Oct. 3 and Nov. 14;

Greg Nie, chief technical analyst at First Union Securities on Oct. 4;

Edward Kerschner, chief global strategist at UBS Warburg on Oct. 10 and Nov. 14;

Charles Payne, chief analyst at Wall Street Strategies on Oct. 11;

Brian Belski, fundamental market strategist at U.S. Bancorp Piper Jaffray on Oct. 18;

Tony Dwyer, chief market strategist at Kirlin Holdings on Oct. 18;

Scott Bleier, chief investment strategist at Prime Charter on Oct. 26 and Nov. 5;

Robert Robbins, chief investment strategist at Robinson-Humphrey on Oct. 27.

Accountability Report Card: 4Q 2000
Date	Source	Recommendation/forecast	*Performance (in percents)	TaskMaster says...
Oct. 2	Thomas Galvin, chief investment officer at Donaldson Lufkin & Jenrette **	Buy: Owens Corning (OWC Quote - Cramer on OWC - Stock Picks), Citrix Systems (CTXS Quote - Cramer on CTXS - Stock Picks), Compuware (CPWR Quote - Cramer on CPWR - Stock Picks), BMC Software (BMCS Quote - Cramer on BMCS - Stock Picks) and Novell (NOVL Quote - Cramer on NOVL - Stock Picks).	OWC: 20 CTXS: 49 CPWR: 24.6 BMCS: 66.8 NOVL: -35.8	Individual stock picking much better than macro "bottom" call.
Oct. 4	Christine Callies, U.S. stock strategist at Merrill Lynch	It is "premature" to declare that the Comp has bottomed, but investors willing "to start nibbling before the correction is over" should start scaling in, now that the Nasdaq has breached 3600.	COMP: -35.6	Anybody who "nibbled" at 3600 is now choking.
Oct. 5	Marshall Acuff, portfolio strategist at Salomon Smith Barney	Buy: America Online (AOL Quote - Cramer on AOL - Stock Picks), IBM (IBM Quote - Cramer on IBM - Stock Picks), Kimberly-Clark (KMB Quote - Cramer on KMB - Stock Picks), SBC Communications (SBC Quote - Cramer on SBC - Stock Picks), Tyco International (TYC Quote - Cramer on TYC - Stock Picks), United Technologies (UTX Quote - Cramer on UTX - Stock Picks), Chubb (CB Quote - Cramer on CB - Stock Picks), Century Telephone (CTL Quote - Cramer on CTL - Stock Picks), IMS Health (IMS Quote - Cramer on IMS - Stock Picks).	AOL: -27.8 IBM: -5 KMB: 21.8 SBC: -11.3 TYC: 2.9 UTX: 8.8 CB: -11.1 CTL: -12 IMS: 6 RX: 21.9	Pretty solid, all things considered.
Oct. 5	Tony Dwyer, chief market strategist at Kirlin Securities	Buy: Applied Materials (AMAT Quote - Cramer on AMAT - Stock Picks), Atmel (ATML Quote - Cramer on ATML - Stock Picks)	AMAT: -12.2 ATML: -15.7	Not bad, all things considered. But not good, either.
Oct. 17	Gregg Schreiber, vice president of institutional futures sales at Bear Stearns	"It's a bear market [and] I don't see any bottom in sight."	DJIA: 4.3 SPX: -7 Comp: - 29.4	"No bottom" was the right call.
Oct. 17	Bob Brinker, publisher of Bob Brinker's Marketimer	...go long the Nasdaq 100 Trusts (QQQ Quote - Cramer on QQQ - Stock Picks), expects QQQs to rally 20% over the next two to four months.	QQQ: -34.2	It's a long way to 20% rally from mid-Oct. levels.
Oct. 24	Thomas McManus, equity portfolio strategist at Banc of America Securities	"it won't be a complete, reliable, viable bottom until we see more in the way of traditional signs of liquidation."	DJIA: 1.3 SPX: -10.2 Comp: -33.7	Guru of the Year for 2000.
Oct. 25	Walter Nightingale and Gary Farber, Nightingale & Farber Capital	Buy: Verizon (VZ Quote - Cramer on VZ - Stock Picks), Nextel Communications (NXTL Quote - Cramer on NXTL - Stock Picks), Global Crossing (GBLX Quote - Cramer on GBLX - Stock Picks)	VZ: 1.8 NXTL: -38.1 GX: - 30.8	Bad time for telecom.
Nov. 2	Michael Shaoul and Timothy Brackett of Oscar Gruss & Son	Biotechs are a bubble.	BTK: -30.1 IXBT: -28	Maybe "bubble" was too strong, but the sell call was right.
Nov. 7	McManus	"We have yet to experience a wave of [mutual fund] liquidation notices in today's environment, and that is one reason we have yet to ratify the consensus view that October's lows marked an important market bottom."	DJIA: -3.9 SPX: - 12.3 Comp: -33.6	GOTY
Nov. 9	Joseph Keating, chief investment officer at Kent Funds	Buy: WorldCom (WCOM Quote - Cramer on WCOM - Stock Picks), Intel (INTC Quote - Cramer on INTC - Stock Picks), EMC (EMC Quote - Cramer on EMC - Stock Picks), Dell (DELL Quote - Cramer on DELL - Stock Picks) and Cisco (CSCO Quote - Cramer on CSCO - Stock Picks)	WCOM: -1.6 INTC: -25.7 EMC: -48.3 DELL: -27.3 CSCO: -52.8	Wrong time for big-cap tech.
Nov. 9	Brian Belski, fundamental market strategist at U.S. Bancorp Piper Jaffray	Buy: Dell, Intel, Microsoft (MSFT Quote - Cramer on MSFT - Stock Picks), Compaq (CPQ Quote - Cramer on CPQ - Stock Picks), Micron (MU Quote - Cramer on MU - Stock Picks), Siebel Systems (SEBL Quote - Cramer on SEBL - Stock Picks), i2 Technologies (ITWO Quote - Cramer on ITWO - Stock Picks)	DELL: -27.3 INTC: - 25.7 MSFT: -20.6 CPQ: -22.5 MU: 17.9 SEBL: -48.5 ITWO: -53.9	I reiterate, wrong time for big-cap tech (Micron aside).
Nov. 13	McManus	Buy: Cardinal Health (CAH Quote - Cramer on CAH - Stock Picks), Alza (AZA Quote - Cramer on AZA - Stock Picks), Freddie Mac (FRE Quote - Cramer on FRE - Stock Picks), Fannie Mae(FNM Quote - Cramer on FNM - Stock Picks), Kimberly-Clark, Avon (AVP Quote - Cramer on AVP - Stock Picks), Reliant Energy (REI Quote - Cramer on REI - Stock Picks); ***Southern Energy (SOE Quote - Cramer on SOE - Stock Picks), Constellation Energy (CEG Quote - Cramer on CEG - Stock Picks)	CAH: 10 AZA: -7 FRE: 16.3 FNM: 7.8 KMB: 4.9 AVP: -12.7 REI: -0.5 SOE: -2.8 CEG: -0.6	Not bad, but macro calls were better.
Nov. 16	John Bollinger, BollingerBands.com	Buy: Integrated Device Technology (IDTI Quote - Cramer on IDTI - Stock Picks) at $32.	IDTI: up 28.8% since hitting $32 on 11/30.	A good call.
Nov. 17	Don Hays, president of Hays Market Focus	Predicted the Nasdaq will continue to decline for the next six to 10 weeks. Forecast the end of the decline will come after a "climactic four-five days that will really knock the stuffing out of the market" and take the Comp to as low as 1800.	Comp: Fell as low as 2252 on Jan. 3.	Right direction, wrong target.
Nov. 28	Greg Smith, market strategist at Prudential Securities	"The days of growth at any price are definitely behind us, and we might wind up with moderate growth at a reasonable price or having a more value-oriented outlook."	SVX: 0.4 SGX: -16.6	Yep.
Nov. 30	Brett Gallagher, head of U.S equities and deputy chief investment officer at Julius Baer Investment Management	If the market bottomed today, "it's certainly not one that's going to stick." ...sees 1800 as "fair value" for the Nasdaq. "Now that momentum is entirely broken, we think approaching those levels is a bit more likely."	Comp: -12.7, traded as low as 2251.	Again, right direction, wrong target (so far).
Dec. 4	Christine Callies	Buy : Convergys (CVG Quote - Cramer on CVG - Stock Picks), Liz Claiborne (LIZ Quote - Cramer on LIZ - Stock Picks) and Wal-Mart (WMT Quote - Cramer on WMT - Stock Picks)	CVG: -11.4 LIZ: 12 WMT: -6.7	So-so, which is pretty good considering.
Dec. 5	Greg Nie, chief technical analyst at First Union Securities	"This was a relief rally in the truest sense of the word. "It's too optimistic to say we're putting in a V-bottom. The underpinnings are iffy [regarding] sustainability."	DJIA: -3.4 SPX: -8.8 COMP: -21.5	Learned the error of his bottom-picking ways.
Dec. 14	Sam Ginzburg, senior managing director of equity trading at Gruntal	Buy: Raymond James (RJF Quote - Cramer on RJF - Stock Picks), A.G. Edwards (AGE Quote - Cramer on AGE - Stock Picks), Morgan Keegan (MOR Quote - Cramer on MOR - Stock Picks)	RJF: 20.9 AGE: -13.4 MOR: 44.1	Meatloaf was right: Two-outta-three ain't bad.
Dec. 18	Ginzburg	Short Providian (PVN Quote - Cramer on PVN - Stock Picks)	PVN: 4.9	Better on the long side.
Dec. 19	Peter Canelo, U.S. investment strategist at Morgan Stanley Dean Witter	Foresees managers switching back into tech once the new year arrives. Believes expectations for 14% growth in tech earnings in 2001 are overly pessimistic -- he's looking for high teens. Says valuations in the sector are "absurdly low."	Comp: Rose nearly 25% in January.	Good call on January, but earning estimates seem overly optimistic.
Dec. 24	Hays	Announced that his asset-allocation model had turned bullish, suggested the Comp and S&P could enjoy 15%-to-20% gains and the Dow might approach its all-time high in a forthcoming rally.	Comp: Rose as much as 12.8% on closing basis after 12/24. SPX: rose as much as 5.2%. DJIA: Traded as high as 10,984 vs. record 11,311.	Again, right on direction, wrong on the targets.
*Percent (%) change through Feb. 21 unless otherwise noted. ** DLJ acquired by Credit Suisse First Boston on Nov. 3.*** Now Mirant (MIR Quote - Cramer on MIR - Stock Picks). Source: Baseline.

Remember, the performance column assumes an investor held the stocks from the time the call was made through yesterday's close. The reality is that most of the sources (it's hoped) altered their portfolios during the intervening period.

As always, we'll try to catch up with the sources in the coming days to update their calls. Given recent published reports and comments from Applegate, Belski, Cohen, Kerschner and Robbins, I can tell you none has markedly altered his or her viewpoint.

Another update I can provide now regards Bob Brinker of Bob Brinker's Marketimer. In the February issue of his monthly newsletter, Brinker wrote "our expectation of a target range [for the QQQs] in the 80 to 90 range remains intact. We believe this remains an achievable objective into the second quarter."

Brinker will "work to identify an appropriate sell point during the coming months" for the QQQs. It's possible Brinker has changed his outlook since the newsletter was published on Feb. 7, but in that issue -- and in a recent conversation with me -- the market timer seemed as adamant as ever that his "countertrend rally" call will prove accurate. The QQQ was off 0.50; or 0.97%, to 51 today after trading as low as 48.89.

Finally, also missing from the table above were a few good calls from Steven Hochberg and Peter Kendall, co-editors of The Elliott Wave Financial Forecast. Late in the fourth quarter, the newsletter writers correctly identified mid-December and late January as Fibonacci turn dates, indicating short-term changes in the market's direction.

More recently, on Feb. 2 to be specific, Hochberg said the next expected turn date isn't until late March, suggesting February could be "choppy" at best for those long. The Comp could retest its Jan. 2 lows and the Dow could break 10,000, he forecast.

This ends Part 2 of a two-part story. If you missed it, please be sure to read Part 1.